With its new Uncarrier 5.0 initiative, T-Mobile and CEO John Legere is offering two new features it hopes will make an impression with customers. The first is known as Test Drive, where T-Mobile will lend potential customers an Apple (APPL) iPhone 5s to try it out and test out T-Mobile's updated 4G network. The carrier has been improving its wideband LTE data speeds across the country. Following that, the customer has the phone for a full seven days, after which it has to be returned to any T-Mobile store or the customer can purchase a new iPhone and service plan.
T-Mobile shares was gaining 1.03% to $33.02 in midday trading in New York.
Kevin Burden of StrategyAnalytics believes T-Mobile has its work cut out for it. "There is nothing new about test driving a network before subscribing, except that it's 2014 and most operators stopped offering trials years ago," Burden said in an interview. "Getting a high-end loaner device to operate the test drive is a nice twist that should get users excited and could potentially benefit Apple even more than T-Mobile, since the operator is running the risk that its users verify their fears that T-Mobile's network doesn't cover their area well at all."
T-Mobile has been able to gain attention for its network, but it's come at a cost. In the first quarter of 2014, the company boasted a total net additions of 2.4 million users, marking the first quarter ever with more than 2 million net additions. IDC Research analyst Carrie MacGillvray believes T-Mobile UnCarrier 5.0 offerings are more about current customers rather than attracting new ones. She think these new offers could go a long way to help satisfy its paying customers and relieve any "pain points" they might be experiencing with the service.
The first quarter was the fourth consecutive quarter with over 1 million total net additions, a record low branded postpaid churn of 1.5%, down 20 basis points sequentially and down 40 basis points year-over-year and it was the fourth consecutive quarter of pro forma sequential service revenue growth.
However, Adjusted EBITDA during the quarter was $1.1 billion, down 12.2% sequentially, and branded postpaid ARPU was $50.01, down 1.4% sequentially. For 2014, T-Mobile said it expects Adjusted EBITDA to be in the range of $5.6 to $5.8 billion. T-Mobile's second quarter 2014 numbers are scheduled to be released July 31.
The other new feature has to do with streaming music. In addition to unlimited use over Wi-Fi connections, T-Mobile is now offering unlimited music streaming over it's LTE data networks to its customers.
The downside to the new music streaming offer is that not all companies are part of that unlimited deal. For now, only Pandora (P), Spotify, iHeartRadio, iTunes Radio, Slacker, Rhapsody and Samsung's new Milk Music are part of the free offer.
Gartner analyst Bill Menezes thinks these new offerings will remain new for only a short period of time. "The music streaming piece is an attention grabber not because it's a big consumer pain point - music streaming apparently doesn't constitute a big chunk of monthly data consumption - but because T-Mobile is jumping into the whole area of favoring some types of data traffic over others," Menezes said in an interview. "That's exactly what AT&T caught flak for when it announced its Sponsored Data service and what for many people is at the heart of net neutrality. TMO says it will poll its customers to see what other music services it should exempt from its data allotments; that puts small, startup services that few customers use at a huge disadvantage."
-- Written by Gary Krakow in New York.
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