T-Mobile CEO: Upswing Not Just a Blip and iPhone Is Only Part of the Reason

T-Mobile CEO John Legere said that the No. 4 U.S. carrier will continue to gain customers from rivals as its new strategy takes hold.

“This is not a one time blip,” CEO John Legere said on a conference call with investors following its second quarter earnings. “Customers are responding extremely well to the moves we are making.”

The company added the iPhone and did away with contracts and subsidized phones in March and has since added a number of new options, including its Jump program that lets customers who pay $10 a month upgrade their phones as often as twice a year.

Smartphone sales last quarter were particularly strong, representing 86 percent of devices for a total of 4.3 million. Even if you take out the 800,000 smartphones sold by MetroPCS after that deal closed, smartphone sales were up 60 percent from the prior quarter.

Nor, Legere said, was that just a benefit from the iPhone, which he said accounted for just 21 percent of smartphone sales (meaning the company sold somewhere under 1 million iPhones).

Legere said the company will unveil Phase 3 in its “un-carrier” strategy in the coming months and said a no-money-down promotion will run through the summer.

“We will not allow our momentum to be impeded,” he said. “We’re just getting started.”

Update: Answering analyst questions, Legere said that he expects a stronger response from its larger rivals, but added that T-Mobile still expects to add more customers in the second half of the year than it did during the first half.

Legere said T-Mobile is eager to grab customers from Leap Wireless, which sells under the Cricket brand. However, he said that T-Mobile had no interest in buying the company, which is now in the process of being acquired by AT&T.

“We’ll acquire Leap’s customers the old-fashioned way,” Legere said.

AT&T may be buying Leap, Legere said, but added, “It doesn’t mean there will be any customers left by the time they get through the process.”

As for its effort to target business customers, Legere said he would put that in the category of “coming attractions,” saying that business remains small. The carrier said it will have more to say later this year or early next year.

Legere continued his attacks on the larger rivals saying that the industry got “fat and bloated” which leaves opportunities and makes it tough for them to respond to T-Mobile’s moves.