A PYMNTS Company

Stop Creating Corporate Goliaths

 |  June 2, 2019

By The Editorial Board, New York Times

For years, T-Mobile’s chief executive, John Legere, has gleefully bad-mouthed his much larger mobile phone competitors, Verizon Wireless and AT&T, for their high prices and profit margins, and their low-quality service. Decked out in magenta sneakers and T-shirts, sporting long hair like an aging rocker, Mr. Legere promoted T-Mobile and himself to his 6.2 million Twitter followers as renegades — telephonic cool kids.

T-Mobile wooed customers by offering service plans with no long-term commitments, and by paying to free those customers from their old service plans. Rolling your unused data and minutes into the next month? T-Mobile did that, and AT&T and Verizon had no choice but to follow. More recently, T-Mobile vowed to match any discounts offered by competitors.

The fierce competition, and the march of technology, has rapidly reduced the cost of mobile phone service. Since 2009, the average cost of mobile service has fallen by roughly 28 percent, according to the Labor Department’s calculations. In 2017, at the peak of the mobile phone price wars, the Federal Reserve said prices were falling fast enough to meaningfully reduce inflation across the entire American economy.

That’s the beauty of competition. It’s been good for T-Mobile, too. Over the past five years, the company has added more subscribers than its larger rivals.

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