(Mike Nudelman/Business Insider)
John Legere is a CEO who embodies his company, down to his T-Mobile-branded magenta Converse All-Stars.
He celebrated his four-year anniversary as CEO of T-Mobile US in September, the same month the wireless operator launched the T-Mobile One unlimited-data plan. It was the latest iteration of Legere's tenure-defining "Un-carrier movement," his mission to turn T-Mobile into an Un-carrier — essentially the opposite of any other mobile company.
Legere (pronounced "ledger") showed he was a force to be reckoned with when his first Un-carrier move eliminated traditional service contracts and caused his competitors to follow suit.
Since joining the company in 2012, Legere has taken Deutsche Telekom-owned T-Mobile from a struggling mobile carrier known for subpar coverage and service to the third-largest and fastest-growing carrier in the US.
Along the way, Legere grew his hair out, donned a T-Mobile leather jacket, and declared industry leaders AT&T and Verizon "dumb and dumber," the villains to his Batman.
And he changed the company's culture along with himself, getting T-Mobile US employees in the Bellevue, Washington, headquarters and across the country as excited as he was.
Business Insider recently spoke with Legere about his time at the helm, his leadership style, how he thinks T-Mobile is positioned to take advantage of the next five years, and why he's not slowing down anytime soon.
This interview has been edited for clarity and length.
(Samantha Lee/Business Insider)
Richard Feloni: You recently celebrated your four-year anniversary as the CEO of T-Mobile US. When you play the highlight reel in your mind, what major turning points stand out?
John Legere: You know, it actually snuck up on me.
If I ever get a spare day, I fly out to call centers and big retail locations. I was just out at a call center in Augusta, Georgia, and they knew about the anniversary. The employees gave me a big envelope of personal notes, and they sat me in a chair and read me some. They got me crying on camera — that kind of ruined my bad-boy rep!
I'm very careful, especially with the company now, to not spend too much time playing the success reel because I really do believe that everything that's been accomplished can be parlayed in an equal amount going forward.
We did start four years ago with a simple manifesto, as we called it, which was a description of what we were about, and it was the Un-carrier. It was about finding and solving customer pain points in an attempt to fix a stupid, broken, arrogant industry. It was something we felt passionate about.
It was our goal to make changes and have the industry make the same ones. If we just take us, we've gone from roughly 33 million customers to — we'll announce results in a few weeks — but 67 and a half million, last quarter. So obviously that's going well.
And then the Un-carrier moves, they just keep coming. We've done 12, and we already have two or three more in the queue.
So that's the top line, but underneath it, the evolution of the network really is the biggest change. Four years ago, it would have been difficult to understand why investors would agree to attempt to build networks bigger and better than AT&T's and Verizon's. But grinding through the past three years now, we've added a million square miles of LTE.
And then you play the tape all the way forward to the last few changes we've made — moving from Binge On [which allows customers to stream unlimited video from services like Netflix at 480p quality] to T-Mobile One — these are gigantic, seismic shifts in the industry, and I'm not really sure everybody has fully comprehended them yet. They've set the stage for some radical, radical simplification to come.
I'm as bullish about the next four years as I am about the last four.
Feloni: Did you have the manifesto or something similar to it ready when you took on the job at T-Mobile? How did it come up in the first place?
Legere: When I finished my last job, at Global Crossing, it was the first time in God knows how many years that I wasn't in a job. It was probably 32 years or so, and there I was, it was like pow!
Strangely, from a life-change standpoint, I sold the company I was running and got divorced in the same month. And so there I was, at home, and I'm not the CEO.
I took a few months thinking about what I wanted to do. When the first call came in about running a company owned by Deutsche Telekom, I thought it was laughable and really not something I'd do. But I took the meeting mainly because the headhunter I knew, a very good friend, asked me to. At first I thought I was just helping her fill out the roster, but then I dug into it.
When I used to live in Asia, they used to say, "If you're going to sing karaoke, you want to go after the worst singer." And I'd be coming in after the worst singer.
This was a brand that people still loved, the nerds loved it, and it was still there, it was still visible. The advertiser was OK. But it was a mess. It was going down, and the proposed merger with AT&T in 2011 had failed.
It was in my mind, though, intuitively obvious what to do. I had some advisers and friends, and we looked at it and said all you have to do is get the iPhone, buy some spectrum, consolidate the industry, reinvigorate the brand, and take this company public.
So I went, and my first interview was with René Obermann, who was the CEO of Deutsche Telekom at the time — wonderful guy. And right after hello, I told him that it was my opinion that he could only fail one way in the US. I said, "Do exactly what you're doing — nothing."
On the very first day at T-Mobile, I remember sitting there, and as I was doing interviews I thought about this company becoming the complete opposite of the other carriers in this industry, becoming the Un-carrier. The manifesto followed.
Un-carrier was an attitude and a culture and a behavior, and it's an underpinning of who we are, but then the moves started to get labeled Un-carrier as well. And they sound small now, but the very first one, which was eliminating contracts, it was the first of many that if I had asked Deutsche Telekom for permission they never would have let me do them. The Un-carrier announcements then became a little like a tiny version of Apple launches.
A lot of this started because we were a small company — we still are. There's no way we can out-brand or out-share our voice over AT&T and Verizon, so we created our own atmosphere. Social media became involved, and we started being very noisy, very listened to, and we put them on their heels.
Feloni: What's your assessment of the latest Un-carrier move, T-Mobile One, after a full month in?
Legere: The biggest pain point that a million customers told me about is that they hate data buckets. And we had such success with Binge On that we wanted to turn our company into somebody that's selling a monthly subscription to the internet, all in, unlimited.
A week after we announced it, I enhanced it, because I spend every day on Twitter and Instagram and Facebook and email, and people were concerned about low-quality tethering. [Tethering is when you connect a smartphone or tablet to another device, like a laptop, to share internet connectivity.]
(Samantha Lee/Business Insider)
So far, about a quarter of the overall postpaid phone customer-migrations are moving over to T-Mobile One, and about three-quarters of new postpaid phone customers are activating on T-Mobile One. [Postpaid plans are paid at the end of the month and may include overage charges; prepaid plans are paid in advance and give an allotted amount of service.] It's going where we want. It's going to be important not to scare people with it. We're going to slowly move people. There are going to be additional phases to it.
We've got an advantage, and this is the true test. Our network is built for this and it's weird for people to realize that we've got more capacity per customer than anybody else right now. And it's also the reason why we are spending huge amounts of capital on our network. We've balanced out very well.
The noise level is huge, the social impressions are huge. It came at a good time with the iPhone 7 and, yeah, we may need to tweak it a bit, and I've got additional layers to it, but so far it's really been phenomenal.
Legere: First of all, I usually reach right out and engage with thousands of complaints, and if they come in big piles, then I shift over and go on Periscope or Facebook Live. Social media, it's fun and it's a game, but everything you need is sitting there, it's right there. The second thing is, I have a number I use to listen to both sides of customer-service calls. And all you need to hear is that people are calling in, and they're telling you exactly what they want to have.
Most of these issues with T-Mobile One are things that we would expect.
You have to walk some people through it. And with some of our most sophisticated customers, it's very important to tell them, "Hey, keep what you have," and we'll move from here. The 1 or 2% of our most sophisticated customers, they know in fine detail what they're doing, and we respect them and we work it, but as you can see, the masses like this plan.
It's hard to explain in one-liners what happens regarding the usage past 26 GB. Competitors or others sowing fear and doubt can say it's a data cap and a throttling component, but it's not. If you have the time and you can sit somebody down and say that on 65,000 nodes of the network, when two of them have a five-minute congestion period where no traffic is moving, we ask those who have used the most data for milliseconds to slow down so we can clear the traffic. That's easier to understand!
Feloni: At this moment in time, what is your summary of where AT&T, Verizon, and Sprint stand?
Legere: Confused, befuddled, and in trouble.
In general, AT&T and Verizon don't want to be in this business anymore. They haven't wanted to. We screwed up something that was their plan. Their plan always was to use the excess margins of these captive wireless players to migrate to new and future industries for revenue growth. To use a war analogy, we bombed their factories.
AT&T basically hasn't added a postpaid customer on the voice side since Q2 of 2014! If I hear one more time that in two quarters their over-the-top offers are coming out and life's going to be grand ... it's to protect and defend their profit streams and play a different game in the future. But every now and then we get their attention, and then they decry us, and then it's "me too," but it's too late, and then it shifts.
They refer to customers as units of acquisition. They just don't get it. The guy that runs the wireless is like four levels down from the top, and he's not even allowed to do anything.
They do have some good stuff. If I had a content and a cable asset along with my wireless, I would start putting these things together, instead of bundling them. Put that on the side, but right now they seem very content. AT&T donates close to 50% every quarter of the customers who come to T-Mobile.
Now, Verizon's a bit more befuddled. They've got the acquisition of iconic 1990s internet companies [AOL in 2015, Yahoo in 2016] and a leadership shift that's going on now, with two or three aggressive people who are all vying to crawl into Lowell McAdam's CEO chair, and it's hilarious.
Like oh my God, you not only bought Yahoo, but they're a mess before you brought them in. Now I do know, respectfully, underneath that, there is an advertising and a customer-information component to the deal that is very valuable, one that most people don't look at really why they're buying these things. But it's not the real business that they're in. So in the meantime, again, wireless is not really where they are. They lost the headline "We're the best network," and they're fighting desperately to capture it back, spending a lot of money.
I love that they're slapping Sprint around — that's just beautiful. What I would say is, they misstepped already. They attempted to capture the 5G brand before 5G really was a thing. They attempted to put in the minds of consumers that at next year's Super Bowl, you're going to have consumer wireless applications, and it's just not true. So they've got some good capabilities in 5G, but they overstepped, and now it's put a bit of a cover on their ability to capture that brand.
Sprint is ... people don't fully comprehend that their economics and balance sheet have them on a timer for when you're going to cook an egg or something. These guys are playing the game for two quarters, kicking the can down the road, trying to survive. The financials, it's pretty much walk around the house and use anything that's not nailed down to raise money so we can go to the next quarter — and let's show some postpaid nets, even if we have to push them over from our prepaid side.
But they stumbled onto a good commercial. It'll run its course, but it's clever. Their ads are not true, though — there's a gigantic difference in networks. But I don't talk about them, ever. I compete with Sprint with MetroPCS, and it's completely cleaning their clocks.
If everybody's happy with the way things are right now, I'm good. Because in X amount of time I will be the largest wireless player in the country by a mile. Because each of the three carriers have been donating customers to me every quarter for three years. And so if they're good, I'm good. And the benefit I have is my revenue's grown 13% and my earnings have grown 35% and I'm about to hopefully succeed in a major auction to give me capability for the next five to seven years.
Feloni: You teased 5G capabilities. Is that when you think you'll finally overtake Verizon and AT&T in the US, years down the line? Is that the goal?
Legere: 5G from a consumer-wireless standpoint is 2020, but I had the chairman of the FCC out in Seattle last week and we did demos on 5G and what's coming — and it's phenomenal! And we've got more of an advance as to where it's going than anything else.
I would say what people are missing is the LTE advanced in the 4G-space changes. 5G is very important, and we will be a leader in it, but there's some amazing stuff between now and then. And then the infrastructure questions are just huge, of course.
Feloni: Earlier you mentioned you travel a lot to interact with employees. What are the tactics you use to engage them? And how did you rebuild the structure from the ground up?
(Samantha Lee/Business Insider)
Legere: It's one of those things that until you're actually doing it, you sound like every other suit who spews the pablum at Christmastime about you being our most important asset — it turns my stomach.
On my very first day at T-Mobile, I demanded that every time I spoke publicly to the company, all employees across the country would be invited to watch. I faced legal and all that crap, but ultimately we were able to figure it out. We record it, too, so if somebody can't leave the sales floor, they can watch it later. And I take full, live interactive text and voice Q&A from all of our roughly 50,000 employees.
Another thing I did very early on is give every employee stock, which we continue to do. So every time I speak to them I speak way over some of their heads. I tell them about spectrum, the results, the EBITDA, the options, and then I stop and tell them, "Listen, if some of this doesn't make sense to you, what should make sense is the reason I'm telling you — I respect you as an owner and as a partner and I'm going to tell you this all the time. Feel free to tune out."
And as I mentioned earlier, I visit call centers. We've got about 18 major call centers in the US, and before I was CEO, I heard that no CEO had gone to physically visit them. So I created — and I have it in my book right here with my calendars — a color-coded sheet of paper showing me how many days it's been since the last time I visited each call center. I'm on the end of my fifth visit to each of them.
It's not that complicated. I go in, they meet me outside, we take selfies as I stand like a piece of furniture, I tell them about how things are going — but most importantly, I say thank you and help them see that their behavior and their work has driven the culture of the company that's changed the industry and the whole world. It's a bit of a love affair.
When I go to retail stores, I jokingly tell the employees that everybody between me and them is the enemy. In effect, what I mean is that in my paramilitary hierarchy, if I can hear them and they can hear me, everything will be fine. All we need to do is make sure the entire company understands that it's their job to pass information between us. And so far so good.
Feloni: When you were rebuilding the structure, you reinvented yourself. What was the thinking behind that, and then how did that persona work its way into your personal life?
(Samantha Lee/Business Insider)
Legere: Well, when we're talking about the transformation, we can add in the 25 pounds I've gained — I've been eating my way through the wireless industry.
Part of my role at T-Mobile is the ability to just be myself, because I'm 58 years old and I've done very well, and I don't need to fight my way up the hierarchy with my suit and hair anymore.
The other thing is, it's a young, consumer-driven business, and the average age of my customer outside of Bellevue is 27 or 28. They like outspoken, frank discussion. And then my customers skew very young. So I just kind of started it.
There was an event where it started to come together. At the Consumer Electronics Show in 2013, onstage with Joe Torre and some baseball players talking about a partnership with Major League Baseball. During the Q&A part, I thought the audience would only care about the MLB guys, but they wanted to know what was on my mind. And I snapped. I mean, I literally snapped, for minutes, about the state of the wireless industry. Over the next 24 hours, there was a lot of stuff that was coming out of my mouth that was meant to stay in Vegas, but it hit a chord. It was an action statement for me — I'm sure it sounded a bit arrogant — that I was going to fix this industry.
From then on, I started to be the brand, more and more. Seven days a week, 24 hours a day, I wear T-Mobile gear. I'm a bright beacon of magenta. My clothing's gotten more elaborate because a lot of people want me to wear their clothes! And then when I go to a call center, I give away my T-Mobile clothes, and walk out to my car with my socks on.
My interaction with my followers on social media has become a phenomenon, and that's hardcore work every day! I have carpal tunnel from typing on my device.
Feloni: You're focused on guiding along younger employees. What advice you would give them, and what would you tell your 20-year-old self?
Legere: If you go back in my career, you'll find I've always been a lead-from-the-front people-manager guy. I've always been outspoken. I've always attempted to break the mold. My advice to myself, then, would be to go all in on it. The world doesn't need another cookie-cutter business-school leader. The world needs somebody to stick out and be loud and proud.
It's kind of fun at my age to go back and talk to business-school people. I tell them, "I can summarize everything you need to know to lead a major corporation. Are you prepared to write this down?" And then they get all ready. I tell them I can summarize how I succeed as a leader: Listen to your employees, listen to your customers, shut the f--- up, and do what they tell you. Then I say that the genius of the marketing strategy that we've had in every company that I've ever been in, is that if you ask your customers what they want and you give it to them, you shouldn't be shocked if they love it.
I think this job at T-Mobile has more than anything else helped me really see and understand how to set a strategy, communicate like crazy, and then passionately lead from the front of it.
Below are some of the letters employees at the Augusta, Georgia, call center read to Legere when he visited on September 23.
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