T-Mobile US hits 21 consecutive quarters of 1mn subscription adds

Another three months have passed and yet again we are reporting about the eccentric John Legere and his unique use of punctuation cooing over 1.6 million net additions to T-Mobile US subscriber numbers.

With these new customers in the 21st consecutive quarter of at least 1 million net adds, it now takes total subscribers in the T-Mobile US grasp to 75.6 million. Total revenues are up 4% to $10.6 billion across the second quarter, while the 4G LTE network now covers now covers 323 million people, just 2 million short of the end-2018 target.

“T-Mobile just recorded its best Q2 in company history,” said John Legere, CEO of T-Mobile US. “That means 21 quarters with over one million net adds, record-high service revenues, industry-leading postpaid phone net additions, and record-low postpaid phone churn. Our business is strong, our strategy is working and we won’t stop.”

While these numbers are certainly something for the boisterous and unconventional CEO to shout about, the earnings call leaned naturally towards the much-anticipated tie up between T-Mobile US and Sprint. While the deal is working its way through the regulatory approval process in typically slug-like fashion, there are whispers in corners of the industry it may well be blocked by the watchdogs.

Fortunately for T-Mobile US, aside from scale and more efficient operational processes, it doesn’t seem to need Sprint that much. Yes, the boost to subscription numbers, the existing footprint and certain spectrum assets would be welcomed, but T-Mobile US is a company which is continuing to gather momentum on its own. The team boasted of an aggressive deployment of 600 MHz across the quarter, augmenting existing low-band capabilities on 700 MHz, while also being awarded the fastest LTE network according to Ookla, and winning 5 of 7 categories in most recent OpenSignal study.

One area of concern might be ARPU. Competitors have started to show better numbers when it comes to service revenues through increasing ARPU, while T-Mobile US improvements have come as a result of acquiring customers. At some point it will start to become prohibitively expensive to acquire new customers in the fashion investors are becoming comfortable with. Executives might start looking back at the declining ARPU, it dropped 1.2% to $46.52, as a missed opportunity. The declines being witnessed are not massive, but incrementally they will start to add up.

Period ARPU
Q2 2018 $46.52
Q1 2018 $46.66
Q4 2017 $46.38
Q3 2017 $46.93
Q2 2017 $47.01
Q1 2017 $47.53
Q4 2016 $48.37
Q3 2016 $48.15

Of course, in relation to competitors increasing ARPU numbers, Legere was as combative as you would expect:

“And let me just add a couple of things, when you really deep dive some of these ARPU changes and trajectory with the competitors, you’ve got to remember that they’re doing it by screwing the customer. Administrative fees are a huge part of what’s happening there and you’re taking that out of the pockets of existing customers.”

Irrelevant as to whether you like the colourful attitude of the CEO, or find the purposely-obnoxious presentation irritating, you can’t argue with results. T-Mobile US is continuing to gather steam and be a pain to competitors.

28m net adds – Jio numbers really are quite remarkable

Reliance Jio has reported its numbers for the last three months, and it does make for some very interesting reading.

28.7 million net adds for subscribers across the quarter, taking the total up to 215 million, and a churn rate of 0.3%. Few telcos can claim to get anywhere near these numbers, though it seems Jio is doing it while making money as well, with the team claiming net profits of roughly $89 million. The traditional players in the Indian telco market must be pulling their hair out over the cheap offers Jio is able to offer while continuing to be profitable.

“Jio continues on its path to drive digital revolution in India,” said Mukesh Ambani, MD of Reliance Industries. “We doubled our customer base and most user metrics in the last 12 months.

“215 million customers within 22 months of start is a record that no technology company has been able to achieve anywhere in the world. Jio has built an ecosystem for digital services and its affordable and simplified pricing strategy offers every Indian a chance to experience the ‘power of data’. FTTH and Enterprise services with strong fibre backbone across the country would further establish Jio’s leadership as a digital services provider.”

The Jio mission seems to be about creating scale, leaning on efficiencies and then creating new opportunities to monetize the user though diversified offerings. But, it does all start with encouraging the consumer to be a more active participant in the digital ecosystem.

The network has continued to expand, Jio now claims to cover 99% of the Indian population, and to have the only network to deploy pan-India 4G across the 800 MHz, 1800 MHz and 2300 MHz bands. These are not the only boasts, as the team also believes it has the world’s largest mobile data consumption and VOLTE networks. What this does offer is opportunity for the consumer to deep dive into digital.

Jio consumers use on average 10.6 GB of data per month, while spending 744 minutes talking on devices and 15.4 hours consuming media. The more Jio can convince its users to spend online, the more money it makes. This might seem like a simple idea, but the previously digitally starved Indian consumer is certainly gaining an appetite.

Of course, mobile is just the beginning. When we saw Mathew Oommen’s, President of Reliance Jio Infocomm, presentation during the Big Communications Event in Austin this year, he was bullish about diversification and convergence. Broadband was a big area of focus, with Oommen claiming there are only 18 million broadband connected homes in the country, while the enterprise market is currently at a fifth of what it could be. These targeted segments are becoming apparent.

JioGigaFiber, which will offer both consumer and enterprise broadband and entertainment services, was announced earlier this month. Customers across 1,100 cities can no register for services starting 15th August 2018, with the launches being dependent on demand. Broadband will be a more capital intensive campaign for Jio, though we suspect there might be a few initiatives in the pipeline to encourage subscriptions.

Elsewhere in the business, JioTV is growing, as it JioCinema, while the combination of JioMusic and Saavn is starting to look like a winner as well. MyJio, the self-care app, now has more than 200 million downloads, and the mobile payment business is starting to gather steam.

Mobile might be where Jio caused the chaos on the first place, but the team is clearly not satisfied with just being a telco. Jio is on the verge of becoming one of the most influential businesses in India, touching the consumer in every aspect of life.

Jio does it again as new deal sends shares tumbling

Reliance Jio has unveiled a new postpaid tariff to further undercut rivals plans and reinvigorate the enthusiasm which saw millions of customers flock to the telco.

The new deal is priced at Rs 199 per month offering 25 GB data, while all phone calls and texts are also included. It is pretty much as low as you can get but still make money (questionable as to how much though), with the added bonus of tumbling share prices for all its competitors.

Over the last 24 hours, shares in Bharti Airtel dropped almost 6%, Idea Cellular was down 14% and Reliance Communication was down 5%. Vodafone’s share price is unlikely to be drastically influenced by one market, but the management team will be wondering when the misery is going to end.

The last few months have been a bit quieter in India, which must have come as a welcome rest for the traditional players. Jio’s entry caused chaos in a stagnant market, with the spreadsheets starting to pick up some weighty bumps and bruises. A period of calm might have helped out the likes of Bharti Airtel or Idea, however the launch of this new tariff is the starting bell for another round.

It would hardly be a surprise to see customers tearing up contracts and flocking to the open arms of Reliance Jio. It might not be the free services which were being offered last year, however this tariff can cause some damage. There is one reason share prices are plummeting all over the place, the market knows that the competitors are going to have to match the Jio offer. That means more pressure on profit columns which are already being squeezed pretty tight.

Some might have though the chaos was over and the market could return to calm, but Jio is making sure the party train keeps rolling.

BT scrapes bottom of Ofcom rankings (again)

It’s that time again. Ofcom has released data on who are the best and worst for customer service in the UK. And BT has struggled for another quarter.

Three months ago, the watchdog released the figures for Q1, and while there has been a slight improvement across the board, BT is still struggling. When you compare the figures for this quarter against those from 2011, there certainly is a notable improvement, but perhaps we as consumers are just getting more demanding; it doesn’t really seem things are getting better.

In terms of the top-line figures, fixed broadband got 18 complaints per 100,000 customers (compared to 35 in Q2 2011), while landline complaints stood at 12 per 100,000 (38 in 2011). Postpaid contracts has also been in decline only registering 5 complaints per 100,000 customers (13 in 2011), while pay-TV has remained steady at 4 complaints per 100,000 customers across the quarter (5 in 2011).

“Complaints about telecoms and pay-TV may be falling this year, but some providers are falling a long way short on customer service,” said Jane Rumble, Ofcom’s Director of Consumer Policy.

“There can be no room for complacency. We expect providers, particularly those who have been consistently under-performing, to make service quality and complaints handling their number one priority.”

The problem seems to be the general attitude towards customer service in the industry, it just simply isn’t prioritised. And part of the reason might be the reliance on the digital economy; telcos know that you aren’t going to give up on the digital economy, therefore your choice is to maintain the status quo, or move to another provider which equally doesn’t take it seriously either.

In all fairness, there are a few bright spots on the horizon. Sky, for instance, has proven to be one of the few examples of positivity. In the pay TV game, it registered one complaint per 100,000 customers and only seven in broadband per 100,000 across the quarter. In both examples, Sky was the best performer. Data isn’t available for its MVNO proposition yet, but the signs are looking promising for an attractive multi-play proposition.

Now onto BT. In Landline, broadband, postpaid mobile and pay TV, it registered 15, 28, 11 and 13 complaints per 100,000 customers respectively. In every area the telco was above the industry average. Not great reading.

Telia tries shocking new strategy: improving customer experience

Telcos in the UK might not understand what it means to be customer centric, but the Swedes seem to be having a solid crack at it. Well, Telia at least.

The point of attack here is an app called ‘Min Mobile’, developed by a company called eBuilder, which Telia has a non-controlling stake in. Essentially it is a platform which collects information about you and how you use you device, but then offers advice on how you can improve performance.

It’s an interesting strategy to re-engage customers, who are starting to forget about the operator. Telia’s Gustav Berghog highlighted to us the user is now more concerned with the handset manufacturer and the flashy content providers/OTTs; there is a risk the operator will be thought as nothing more than a commodity, and therefore traded out without much thought or emotional loss.

Ideas like ‘Min Mobile’ are designed to take Telia back into the customer life. The team want to show the operator is more than just a connectivity provider, but provide an experience which adds value. This idea of ‘positive discounting’, as Berghog describes it, removes the idea of an operator relationship being transactional, and aims to create an element of loyalty. That’s ultimately what ‘Min Mobile’ is; a customer retention strategy.

So how does the app work? Once downloaded, the app monitors how you use your device, and aims to predicts any flaws or errors on the device. The app currently monitors four areas; storage, battery, general performance and device condition/age. There are plans to extend in others, but these address the main pain points for consumers for the moment.

After monitoring your device for a while, the app might figure out that your battery performance is 15% less than other users on the same one. Using this information, Telia can make communication with you much more personalised. The might send out a message with tips focused on improving battery life to you, but your partner might get one on storage tricks, as this was an issue highlighted on their device. It is much more appealing, a step away from the general ‘engagement’ messaging which most operators make use of, and it is pretty useful as well.

Data usage is another area which the team might investigate. By monitoring your geographical location and where you turn your wifi on, a pattern will soon emerge. For those who are data conscious, a small reminder to turn on your wifi would be a good little value add. These are not ground breaking ideas, but tie enough of them together and they start to make a difference.

And it seems the Swedes like it as well. Since launching in January, the app has been downloaded 100,000 times, 76% of those downloads retained, and has a rating of 4.5/5 on Google Play. For those who have the app, the Net Promoter Score is 29, compared to a score of 1 when they don’t.  Berghog wasn’t able to say whether this has had a direct positive impact on churn rates, but the early signs are certainly good ones.

But it should be worth noting Telia also plan to make money off this data as well. By collecting information around storage, battery, general performance and device age/condition, and combining that with other data sets such as customer demographic, handset type and historical upgrading behaviour, Telia can start to develop a purchase pattern for each customer. This can be used to approach the customer at the right time to renew an agreement or upsell to more premium products.

Customer retention is clearly an objective for Telia, and creating these purchase patterns mean the team can engage the customer earlier in the process. Potentially the team can start that conversation before the customer get curious by other deals.

Berghog thinks there is also another way the team can provide value by becoming a bit of a broker for the mobile industry. All the data which has been collected so far not only allows Telia to increase engagement, avoid churn and upsell new products, it also tells the team about how you use your device specifically. An ambition for Berghog is to become an independent advisor to the customer.

Imagine you currently have a Samsung handset. With all of this information, Telia might be able to say because the way you use the device, the new Huawei model might be more suitable. It might also be able to suggest not to update to the newest version of an operating system, for example, because that would not suit the way you use your device. Helping the customer make more informed decisions is one way in which Berghog feels Telia can add value and create an emotional connection to the customer.

The best ideas are the ones where both sides of the equation feel they have gained something. This is one of the instances where it could be true. The customer gets a better experience, and potentially a better deal, whereas Telia increases customers loyalty. It is still early days for the moment; Berghog highlighted the team need to validate the benefits to Telia, while also scaling to the rest of the user base, but the early signs are certainly positive.

UK consumers are not convinced by zero rating gimmicks

The telcos want us to spend more money with them, that is a given, but it appears the latest move to bribe consumers with zero rating offers is not working in the UK.

It’s been a slow creeping trend over the last couple of years, but the telcos are making less money. Whether it was the increasing irrelevance of voice minutes, or erosion of generated-cash through SMS, the data frenzy has been killing profits. It’s a cruel irony that the OTTs are using the very networks which the telcos have spent billions on to destroy the profit margin, but it is one which the industry has come to accept.

Monetizing data tariffs, and encouraging users to scale up to more expensive unlimited plans, was one way these trends could have been reversed. But according to new data from uSwitch, users are not convinced by new data plans that offer unlimited use of certain apps, favouring cheaper deals as opposed to the unlimited options.

“While these packages will be spot on for a large number of a mobile users – in particular younger users – they can feel a little restrictive,” said Ernest Doku of uSwitch. “For the older demographic that might not necessarily want to stream content on-the-go or who don’t use messenger apps, there will likely be little in this new provider battleground that stands out.”

Only 19% would switch to a contract with unlimited data usage on certain apps, with this number dropping to 11% for over-55s. 18-34 year olds were more receptive to the idea, with 26% open to changing providers. As 79% of adults now use on-demand services such as Netflix or BBC iPlayer, the telcos are making a fair assumption that these unlimited data tariffs would be appealing, but it does show sometimes statistics do not back up what was promised.

Mobile operators are increasingly turning to perks, such as free subscriptions or zero-rating offers, to attract new users, but it seems the UK are focused on the basics. 61% of the respondents to the research would change for a cheaper deal, 30% would change for better coverage and 23% would change for more flexible deals.

The last reason is an interesting one, and perhaps an encouraging statistic for Vodafone and Three. Both have launched more flexible, month-by-month plans (VOXI for Vodafone and Smarty for Three), which target more cash-conscious consumers.

That said, the statistics do also indicate one thing; to be a good mobile provider, you have to have a network which performs consistently well, and offer services at a good price.

This is a welcomed discovery for Telecoms.com, as it indicates the users of the UK cannot necessarily be bought off with gimmicks and advertising. The user is focused not on the short-term benefit of a free-service, but more of the performance of the telco, which will arguably have a greater impact on the users life.

But the smoke and mirrors should not be seen as a surprise. Why are telcos focusing on gimmicks and the cheesy endorsements of past-it celebrities, which make the brand look cheap and unappealing? Because you don’t have to spend as much on a second-rate celebrity as you do on making sure your network is up to scratch.

Perhaps this is another indication the telcos are shying away from actually investing for the long-term? Maybe it shows us the management team are more interested in short-term pleasures than longevity and sustainability? Or it might just say that the telcos don’t care about customer experience, just as long as they pay up once a month?

There are loads of mobile subscriptions – Ericsson

Ericsson has released its Mobility Report for the second quarter of 2017, and some of the statistics are somewhat surprising.

Firstly, let’s have a look at mobile subscriptions. Over the second quarter of 2017, an additional 92 million subscriptions were added to the global total. The number itself is actually growing 6% year-on-year, bringing the total up to 7.7 billion. That’s right, there are more mobile phone subscriptions than there are people on the planet. And there are those who would call today’s generations over-indulgent.

The total number of unique subscriptions around the world currently stands at 5.3 billion, which means that on average, for every person there are 1.45 mobile phone subscriptions. Next time you are sat on the tube, look to your right and then to your left. Statistically, one of those greedy b*stards has two mobile phone subscriptions. We bet it’s the guy who has the shirt with different colour cuffs and collar to the rest of the material.

Sitting at the top of the pile, in terms of net additions, is China with 19 million. There will be few surprises there, and perhaps few with the next couple of entries. India, Indonesia, the Philippines and Ghana complete the top five. In fact, when you go back to the total number of subscriptions, there are more in China and India (just over 2.5 billion), than there are in Europe, the Middle East, North America and South America combined.

Another interesting area is the room for growth in the smartphone market. Smartphones now account for 56% of the total subscriptions, accounting for 80% of all sales across the most recent quarter. The budget smartphone market is not one which is seen as attractive to the big boys, but if someone could come up with a practical and affordable smartphone which would suit the emerging markets, there is a lot of room to make money. Unfortunately, this is not seen as a viable or attractive business model.

In terms of the total amount of traffic which is crossing the networks now, this is another area which has seen a notable uplift. An increase in data just goes without saying, however Ericsson has noted pricing trends in India and the introduction of more favourable data plans, has bumped up the numbers further than expected year-on-year. Sequentially, the total amount of data consumed increased by 10%, though comparing Q2 to the same quarter in 2016, the uplift stands at 67%.

Mobile Subscriptions 2 Mobile Subscriptions