Ina Fried

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Interview: T-Mobile’s John Legere on iPhone Sales, the Carrier’s Bold Upgrade Program, and Continuing to Shake Things Up

T-Mobile’s biggest news on Wednesday is the introduction of a new program that will let customers upgrade their phones as often as twice a year.

Known as Jump (which loosely translates to Just Upgrade My Phone), the service allows participants who pay a $10 monthly fee to trade in their existing phone for a new one at the same or lower price offered to new customers, and without paying the remaining payments due on the old device. After a six-month initial waiting period, customers can upgrade their phone twice every year, as long as they are part of the program.

That means no more waiting two years when the phone you want comes out a month or two after getting your upgrade.

“This is one of those things that annoys customers so much,” CEO John Legere said in an interview ahead of a New York press event. Legere said that the company wanted to address this issue when it first did away with two-year contracts back in March, but needed a little more time to work out the details.

And that’s not the only big thing going on at the No. 4 U.S. carrier, Legere said.

On Wednesday, T-Mobile is also adding a new family plan designed for the one in three U.S. customers who doesn’t have strong enough credit to qualify for a traditional postpaid contract.

Beyond that, T-Mobile is continuing to dial up its advertising, revamp its stores and add new devices (including Sony’s Xperia Z and the Nokia Lumia 925). Plus, it is quickly expanding its LTE Network — announcing Wednesday that its network now reaches 157 million people in 116 markets (including 73 of the Top 100 markets).

But is all this working?

Legere insists that it is, refuting the notion that T-Mobile has continued to lose share. Legere said that the un-carrier approach is resonating with consumers and luring people away from its three larger rivals in key markets.

Though Legere declined to give full details ahead of the company’s August earnings report, Legere said that T-Mobile is benefiting from more than just an initial iPhone boost — though he said it got that, as well.

“The un-carrier (approach) is really what started to work,” Legere said, sporting his now traditional pink T-Mobile T-shirt and sport coat. But if AT&T and rivals want to think of T-Mobile’s gains as just an iPhone-related blip, Legere said “that’s beautiful.”

Legere said the iPhone made up around 39 percent of April smartphone sales, but that by May, the iPhone made up about 29 percent, indicating strong sales of both Android and Apple devices.

“May was better than April, and April was most of our ‘iPhone blip,'” Legere said.

While not part of Wednesday’s announcements, T-Mobile is also quietly working to rapidly integrate MetroPCS and expand the brand into new territories, using MetroPCS’s sales approach, but using T-Mobile spectrum and devices for cities where MetroPCS lacks spectrum.

The company plans to start selling MetroPCS in 15 markets in the next two months with a bunch more cities to quickly follow.

Legere says the equation there is basically to take T-Mobile phones and fast network and sell them to Leap customers, a reference to Leap Wireless’s Cricket brand — a key MetroPCS rival in the prepaid market.

T-Mobile is also combining both companies’ spectrum in cities where both carriers are serving up LTE. In Las Vegas, for example, the company was able to join its LTE networks and use the added bandwidth to immediately boost speeds for customers of both networks.

The goal is to quickly move MetroPCS fully onto selling devices running on T-Mobile’s HSPA+ and LTE networks, so that, in a couple year’s time, all of the company’s CDMA spectrum can be used for other purposes. Right now, MetroPCS is just selling a handful of HSPA+ devices in a handful of markets, but by the fourth quarter, nearly all new devices will be running on T-Mobile’s network.

And as for shaking things up, Legere insists he is far from done, with another event planned for the fall.

“The pace and innovation flow from us is not going to stop,” he said.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik