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For T-Mobile CEO, Getting Tossed From a Vegas Party Is Just the Beginning

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T-Mobile CEO John Legere(Getty Images North America)

T-Mobile CEO John Legere came out swinging at the Consumer Electronics Show in Las Vegas.

The fourth-largest telecom will offer up to $650 in credits to cover early-termination fees and phone trade-ins for customers who switch over from AT&T, Sprint, or Verizon, Legere announced Wednesday in a speech at CES.

 

"We're giving families a 'Get Out of Jail Free card,' " Legere said. "Carriers have counted on staggered contract end dates and hefty early termination fees to keep people bound to them forever. But now families can switch to T-Mobile without paying a single red cent to leave them behind."

This move is part of Legere's broader vision to upend the entire wireless industry since taking over as CEO in 2012.

"We will become famous for this in 2014," Legere said. "We're going to force the industry to change. I want every customer to have a complete choice. It's going to be a healthier industry."

 

After a near-death experience in 2011 when regulators blocked an AT&T and T-Mobile merger, T-Mobile has a new lease on life. The company has added 4.4 million new customers in 2013.

T-Mobile introduced a string of offerings over to the last year—such as cheaper plans and more-flexible upgrade options—to woo customers away from AT&T and Verizon.

Legere's flair is also piquing customers' interests. The salty CEO, whose pink T-Mobile shirt and cheeky tweets have been a ubiquitous presence at the country's largest tech conference, gained notoriety earlier this week when he was escorted out of AT&T's party at CES.

T-Mobile's defiant behaviour is forcing its competitors on the defensive. AT&T preempted T-Mobile earlier this week with a $450 offering to T-Mobile customers, and began a marketing blitz to promote its speed. Verizon introduced a cheaper plan to match T-Mobile's plan in 2013.

 

The wireless industry's underdog has a long way to go, however, before it catches up with AT&T and Verizon. The two largest telecom companies' high-speed networks service two-thirds of the country's mobile customers and cover a much wider territory. But T-Mobile is chipping away in both areas.

T-Mobile reached a $3.3 billion deal with Verizon earlier this week to purchase a swath of low-band frequencies—the most coveted type of spectrum because of its ability to penetrate buildings in high-density areas and travel further distances in low-population areas. T-Mobile's first low-band acquisition will help improve its service in key areas, such as New York and Los Angeles.

Sprint floated the idea of a merger with T-Mobile in December, according to people familiar with the matter. Such a merger would likely encounter formidable regulatory opposition, especially in light of T-Mobile's resurgence.

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