Rejuvenated T-Mobile shakes up US mobile sector

Heavily subsidized handsets have long been the norm in the US mobile industry, but those days could be nearing an end as the big operators react to changing market dynamics. Leading the charge is a rejuvenated T-Mobile US.

The fourth-largest US mobile network operator by subscribers -- and the target of a rumored takeover offer from SoftBank-owned Sprint -- has shaken up the sector with what its feisty chief executive, John Legere, calls its “un-carrier strategy”. That strategy, focused on cutting subscription prices and providing subscribers with more flexible options to buy and upgrade their smartphones, has helped T-Mobile US gain valuable monthly subscribers and outgrow most of its larger rivals in recent quarters. While such price competition is common in Europe where most markets have at least one low-cost operator, the US market has traditionally been dominated by AT&T and Verizon, which competed on handset deals and network quality instead. Aside from offering some of the lowest priced monthly data plans, key parts of the T-Mobile strategy involved allowing subscribers to upgrade their handsets more frequently and ending smartphones subsidies replacing them with mobile device financing plans. These moves put pressure on rivals to match T-Mobile’s initiatives, including its price cuts.