It’s been a busy day on the US side of the pond as T-Mobile US reported its full-year subscription figures, while AT&T promised a nationwide 5G rollout with few details.
Starting with the controversial and confrontational T-Mobile, the magenta army claims to have added total net customer additions of 2.4 million to the ranks over the last three months, while 2018 on the whole stood at 7 million total net adds. In the final quarter, the numbers stood at 1.4 million branded postpaid net additions, 1 million of which were branded postpaid phone net additions, making it the best quarter in four years.
“The T-Mobile team delivered our best customer results ever in Q4 2018 and we did it in a competitive climate while working hard to complete our merger with Sprint,” said John Legere, CEO of T-Mobile. “That’s 23 quarters in a row where more than 1 million customers have chosen T-Mobile – along with a postpaid phone churn result that’s below 1%. These customer results speak volumes about our company, our network and our brand.”
There is no question T-Mobile US has been a success story under the leadership of Legere, but the big question is how he has done it. In short, Legere has not conformed to the status quo, as you can probably pick up from his ranting and raving on social media, but hyper-targeted marketing has also played a role.
This is a strategy which has been in the making for some time now, the team promised to address markets and demographics which are apparently underserved, or blurred together with generic marketing campaigns. It seems to be the incremental increase approach to growth, but you can’t argue with success.
“…it’s the strategy we laid out for you, going back to 2015 and 2016 is in full effect now,” said COO Mike Sievert on the earnings call. “We said we were going to expand distribution, we did that. We said we were going to expand the segments that we go after and we did that. We were going to add a very serious focus on business, we did that. So, the results have the benefit of all those things in the runway now.
“So that’s a phenomenal uptick. Our suburban market share, we think is 14% to 15%. Our rural market share, we think is sub-10%. Military and older people, 55 plus, sorry Braxton. We think we have a 10%-ish share of both those segments that we’ve been focusing on for a year right now. So, lots of runway behind the strategy left to go, but you are starting to see, as we promised you would the effects of those investments now flowing through into our results.”
One segment which is in currently in the crosshair is enterprise customers. The team might have had one of the most successful quarters to date in this area, according to Sievert, but market share is very low currently. AT&T and Verizon naturally hold the lion’s share of the business, but T-Mobile US has already shown it is perfectly capable of making a challenge to the ‘duopoly’.
Looking ahead to the 5G bonanza, the T-Mobile team has decided to sit out the initial race, or how this has been spun by the PR ‘gurus’, instead focusing on the long-term nationwide charge.
“We are the only ones that have a plan to bring 5G nationwide in 2020,” said Sievert. “And the others are focused on millimetre wave in some places. We are bringing 5G everywhere we operate, and we are doing it by next year and that’s a real differentiator.”
In the pursuit of coverage and due diligence, Sievert is not being factually correct here, making a statement which is indeed inaccurate.
Looking over at the AT&T business, the team has made its own statement, perhaps an effort to redirect attention from the misleading statements it has made concerning ‘5Ge’. This marketing ploy is of course nothing more than an attempt to pray on the un-informed, using small print to its greatest effect, though whether the latest statement is any better we’ll leave you to decide.
Similar to T-Mobile US’ commitment to 5G, AT&T has now promised ‘nationwide mobile 5G footprint’ using sub-6 GHz spectrum by early 2020. The ambitions are certainly noteworthy from both parties, but what we are struggling to stomach at the moment are a lack of details; no-one has actually stepped forward to say what a nationwide rollout actually means.
Does this mean there will be a 5G footprint in every state? What percentage of the US will be covered by 5G? Will the rural communities have a taste of the new connectivity euphoria or will it simply be limited to the busiest sections of the largest cities? What transportation hubs will become a 5G hotspot? How many 5G cell sites are forecast for the time when nationwide 5G coverage will be claimed?
While we are being particularly critical of the claims, we believe this is necessary for an industry which is not always the most honest with its customers.
Although consumers should remain apathetic, though they probably won’t, to the 5G euphoria, or at least until there are 5G-specific services launched, the new networks will become a major marketing plug for the telcos. The marketing team need something new to talk about, and the ‘bigger, better, faster’ tendencies of these departments will ensure 5G is front-page news.
All of the 5G buzz means very little to the consumer right now, but don’t tell them that. However, on a more positive note, it is quite exciting at how quickly the 5G promise is becoming a reality.