T-Mobile Attacks Rumoured AT&T Deal for Amazon's Smartphone
Published on: 18th Jun 2014
Note -- this news article is more than a year old.
T Mobile USA's increasingly bombastic CEO, John Legere has attacked the notion of mobile phone manufacturers offering their handsets on an exclusive basis to a specific mobile network operator.
The reason for the sudden outburst is reports that AT&T has secured the exclusive rights to sell Amazon's rumoured, and now essentially proven to exist, smartphone in the USA.
Amazon is due to show off the smartphone later today.
In a series of angry messages on his Twitter account, he ranted that "Exclusivity sucks for customers. Exclusivity on @ATT sucks for the industry. #justsayin" adding oblique references to an "AT&T Curse", where he implied exclusive phone access on the network is bad news for the phone manufacturer.
Worth noting that a certain Apple iPhone was launched exclusively on AT&T at first. What curse?
Handset exclusivity is often part of the bargaining between vendors and networks, as the networks usually commit to a minimum level of marketing support within their stores and online, in exchange for the exclusive rights to sell the handset for a period of time.
While the handset vendor loses the wider market reach, they get much more direct marketing support within the fewer retailers that can sell the product.
Such tactics had fallen to the wayside in recent years with a slew of generic touchscreen phones on the market, but Amazon's product is said to be sufficiently different as to warrant AT&T wanting to tap into the likely success of the Amazon brand within its stores.
In the wider issue, handset exclusivity has been an issue for the smaller mobile networks who complain that they are being frozen out of the market due to being unable to offer top-end handsets.
With T-Mobile itself a smaller player, its arguments against handset exclusivity should be looked at in light of the expected deal to merge with Sprint. Such bombastic rants from the CEO may be less about the AT&T deal, than about publicly softening up US regulators to approve the Sprint deal so that T-Mobile can compete against the two big networks.