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T-Mobile's Provocative John Legere Touts New North American Plan, Trashes Rivals

The CEO also parried a question about a rumored merger with Dish.

T-Mobile is extending coverage across North America at no additional charge, allowing subscribers to make unlimited calls and texts to Mexico and Canada or travel across the border without incurring tacked-on international fees.

The change to the Simple Choice plan, which takes effect July 15, addresses a major pain point for T-Mobile’s U.S. customers, the company said. More than a third of all international calls and more than half of all international travel from the U.S. is to Mexico or Canada.

“We’re just making Canada and Mexico part of your home territory,” said T-Mobile Chief Executive John Legere. “This isn’t about giving you roaming. Your calling, texting and your LTE bucket is going to be the same in Mexico and Canada as it is in the U.S.”

The announcement represents an extension of T-Mobile’s Simple Global plan, introduced in October 2013, which gives U.S. customers international texting and data free of roaming charges when they travel to some 120 countries and destinations. Calls cost 20 cents a minute.

On a call with Wall Street analysts and journalists, Legere played the familiar role of provocateur, repeatedly referring to rivals Verizon Wireless and AT&T as “dumb and dumber” and throwing in a barb at billionaire Republican presidential candidate Donald Trump, whose characterization of Mexican immigrants as rapists, murderers and drug dealers has drawn criticism.

“Even if Donald Trump walls up to block everybody else from coming in, the phone network will work seamlessly,” Legere said.

Legere touted T-Mobile’s growth story, noting that the carrier has added 2.1 million net new customers in its June quarter — at the cost of its rivals. He hinted broadly that T-Mobile might eclipse the nation’s third-largest carrier, Sprint, once the final subscriber tallies are disclosed to investors.

“We won’t know Sprint’s numbers until they announce later this month. … In terms of paying customers, we’ve been larger than Sprint,” Legere said, adding, “Yesterday, for the first time I think ever, or in a long time, we closed at double the market cap of Sprint. If there’s any question of who’s leading in the marketplace, that’s an indicator.”

Legere saved most of his rhetorical firepower for his favorite target, AT&T. He said the nation’s second-largest mobile carrier sought to extend coverage in Mexico to subscribers in typical carrier fashion: “Spend millions of dollars to lock out competition” with its $1.9 billion acquisition of Nextel Mexico, and its earlier, $2.5 billion deal for Iusacell, which he referred to as “LoserTel.”

“In the future, AT&T would be the first and only provider to provide a seamless calling experience between Mexico and the U.S.,” Legere said of the competing carrier’s motivations. “Not only are you not the only [carrier to do so], you’re not the first — by the way. And we added in Canada.”

AT&T has been working to increase its presence in Latin America, where it sees an opportunity to add millions of new customers. Earlier this year, AT&T announced unlimited calling to Mexico for customers who sign up for World Connect Value — which adds $5 to the customer’s monthly bill. The plan also includes penny-per-minute calling to over 35 countries including Canada and the majority of Latin American and Caribbean countries.

T-Mobile said its subscribers can place calls between the U.S., Mexico and Canada — whether mobile or landline — at no extra charge. Data usage will come from the customer’s 4G LTE data plan; existing customers can call the carrier to switch. T-Mobile is able to deliver the service, minus the pricy roaming charges, through reciprocal agreements with top (but unnamed) carriers in Mexico and Canada.

Legere playfully parried an analyst question about whether T-Mobile would get into the pay television business — a reference to speculation that it is in merger talks with satellite TV provider Dish Network.

“I’ve got my hands full,” Legere said, adding, “One problem with me doing anything other than T-Mobile is I would need a new wardrobe.”

The T-Mobile executive said all content is moving to the Internet, which, in turn, is becoming increasingly mobile and global. The challenge for carriers is to deliver media, content and communications across the world seamlessly, Legere said.

“How are we going to participate in the distribution of video and content to mobile subscribers?” Legere asked rhetorically. “Our first thought is not always ‘let’s buy something’ …. but it is the future. And there’s a big role T-Mobile is going to play.”

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