A more streamlined VC approach could hinder the US in the 5G race

With US venture capitalists increasing their total investments, but reducing the number of start-ups being funded, you have to wonder whether the US is priming itself properly for the 5G bonanza of tomorrow.

According to data from Pitchbook, the total amount invested by VCs in US firms is set to exceed $100 million across a 12 months period for the first time, but the number of completed deals is actually decreasing. So far across 2018, VCs have invested $84.3 billion, already exceeding the total from 2017, though the number of deals has dropped to 6,583 compared to 9,259 last year. These numbers are correct to September 30, still leaving time in 2018, but you have to wonder what impact this will have on the innovators of tomorrow.

Looking at the data, the number of deals which are valued at $50 million or more is significantly on the increase, while the bottom three categories (which you can see in the table below) are decreasing. This is not necessarily a bad sign, innovation can come from larger companies and more established SMEs, though some of the brightest ideas over the last two decades have come from companies which didn’t exist in the 20th century.

VC Deals 1

Think of the likes of Facebook, Uber, AirBnB, Shopify, Android and Netflix, these are all organizations which have risen through the ranks in recent years and are defining their respective segments. All were powered by the democratization of the internet, in particular mobile internet, and the emergence of a new form of economics. They are companies which succeeded because they thought and operating differently from the status quo, leaving many traditional businesses playing catch-up today.

In short, the start-ups are an excellent source of innovation and, in many cases, a completely under-utilised resource for national economies. However, with the upcoming 5G bonanza promising fortunes for those who seize the opportunity, is a more streamlined focus from the VCs creating the right, nurturing environment?

5G is going to create a completely different playing field, though we’re not entirely sure how at the moment. Those who think they can accurately predict where future fortunes will come from are nothing but blowing hot air. They might well be right, but this is likely more to be luck than judgment. For example, back in 2005 who would have thought a relatively unknown networking website designed for university students would become one of the most powerful companies on the planet, influencing elections, stimulating fake news and completely revolutionising how companies communicate with their customers?

The point is there is a ‘build it and they will come’ attitude with 5G. If you create the right technology environments, underpin them with supportive regulations, open doors to new markets and fuel them with seeding funds, the next great idea will emerge. We don’t know what it is just yet, but that was the exciting thing about 4G and will be the exciting thing about 5G.

Another consequence of a lack of available funding for the smaller players is the risk of acquisition. Without the fuel to grow their own ideas, some entrepreneurs might be tempted to sell their business and product to an established company. This in turn would direct innovation into the acquirers main focus area. Perhaps this will leave potential usecases and the dark corners of what is possible unexplored?

The issue here is whether VCs are putting enough cash into the early stage start-ups to nurture this innovation and create the blockbuster idea of tomorrow. Fuelling companies which are already out there is not a bad idea, but it is likely going to get you a better version of what exists today. This is a perfectly acceptable approach to business and will reap rewards, but are these trends going to create a landscape in the US which will dominate the 5G world of tomorrow? We are sceptical.

VC Deals 2

Time Warner acquisition resistance could turn ugly for Trump

President Donald Trump’s administration certainly has been a different shade of politics for the Oval Office, though actions and alleged prejudice could come back to haunt the Commander in Chief.

Despite being proclaimed a resounding victory for the Republicans, the mid-term elections could have gone a hell of a lot better. With the House of Representatives swinging back into the hands of the Democrats, not only will Trump find passing his questionable legislation more difficult, but his actions over the first two years of the Presidency could be called into question.

In an interview with Axios, California Congressman Adam Schiff, who is also the Ranking Member of the House Intelligence Committee, suggested an investigation into the President would now be able to make a material impact because of the swing of power across the aisle. The President’s tax records will once again become a topic of conversation, though the appropriateness of his objections to AT&T’s acquisition of Time Warner will also come under scrutiny, as will his seemingly personal vendetta against Amazon CEO Jeff Bezos.

While the President’s actions have constantly been condemned by critics and political opponents, there has been little opportunity to do anything considering Trump’s political foundations. With majorities in both Houses of Congress, the Republican party have been able to block, or at least stifle, any investigations. However, with last week’s mid-term elections swinging the House of Representatives into a Democrat majority things might be about to change.

Trump’s opposition to the AT&T and Time Warner deal has been widely publicised, dating back to the Presidential campaign trail. Some have suggested his hatred for Time Warner owned CNN is the reasoning behind the probes and appeals against the acquisition, though this will come under question through the investigations.

“We don’t know, for example, whether the effort to hold up the merger of the parent of CNN was a concern over antitrust or whether this was an effort merely to punish CNN,” said Schiff.

While the deal has been greenlight by District Court for the District of Columbia Judge Richard Leon, the Department of Justice is appealing the decision, suggesting Judge Leon is ignorant to the facts and the economic implications of the deal. It has been reported the Trump administration has been pressuring the DoJ to pursue the appeal and attempt to derail the acquisition.

Looking at the spat with Jeff Bezos, this has been tackled on several fronts. Not only has President Trump constantly berated the excellent reporting by the Washington Post, privately owned by Bezos, Trump has been targeting the tax activities of Amazon. Back in March, Trump tweeted he would be tackling the tax set-up at Amazon, sending share price down 2%, while he has also been reportedly pressuring the Post Office to charge Amazon more, despite the eCommerce revolution seemingly saving the service with the vast increases in package delivery.

These are just two examples relevant to the telecoms and technology industry, but the Democrats are seemingly going for the throat. Tax records will be called into question, as well as reports the President blocked the FBI from moving its headquarters because it would negatively impact business as one of his hotels, located opposite the bureau’s offices.

For the moment, this seems to be nothing more than political posturing, as while the statements might appease those in opposition to Trump, they are nothing more than statements. The Democrats will not assume their majority in the House of Representatives for two months, a long-time in the lightly-principled world of politics. Much could change during this period.

What the change in political landscape could mean more than anything else is a bit more stability. President Trump has been praised by his supporters as a man of action, though actions are of questionable benefit to business executives who crave legislative, regulatory and policy consistency. Only with the promise of consistency can businesses made long-term strategies to conquer the world, but with Twitter a constant threat of change it is understandable some are nervous.

With the Democrats in control of the House of Representatives, Trump will find it much more difficult to force through any controversial or overly aggressive policies, though there is also the threat of legislative standstill. The US political landscape has certainly been an interesting one over the last two years, though it could become even more interesting over the next two for completely different reasons.

EU divided on digital tax

Fears over a reaction from the US has sent Finance Ministers from Ireland, Sweden and Denmark cowering back to their spreadsheets as the EU digital tax hits an early stumbling block.

While the collective bargaining power and protection afforded by the European Union is certainly useful, the cumbersome nature of the bureaucratic beast and unanimous decision making ensures it is anything but. As with many proposed rule changes in the past, objections from a handful of member states have slammed the emergency brakes on the digital tax, aimed at holding the internet giants accountable.

According to the Guardian, the Finance Ministers of Ireland, Sweden and Denmark have all aired their criticism not on the concept of the tax, but fears over what President Trump might suggest as a retaliation. There’s a pragmatic approach to business and there’s spineless appeasement to a bully, we’ll let you decide which one this is.

Of course, it would be unfair to herd all of the EU member states into the same cowardly-corner as Ireland, Sweden and Denmark. 12 member states are already moving ahead with their own plans to create a localised digital tax, including the UK as was announced during the Autumn Budget, and some are acting somewhat hawkish about it. The French Government has suggested it would like the tax rates on the playing field by the end of 2018, though Germany seems to be favouring a more watered-down version of the rules.

The EU wide tax on those taking advantage of creative tax regimes, would be the best solution however. A united front against the slippery Silicon Valley internet giants, as well as those from other nations around the world, would of course be the best way to claim that 3% of local revenues, but it is becoming more difficult to imagine that a reality.

The fainthearted trio do of course have something to worry about. Despite Trump slapping tariffs on Chinese goods, and threatening to revamp tax laws so Amazon cannot take advantage of the US tax havens, he would most likely take the US tax as an attack on American values and a threat to the borders. The President is a man or rarely recognises consistency and before too long will probably be describing Jeff Bezos as a close family friend who have been relentlessly pursued by the penny-pinching Europeans.

Ireland also has a lot to lose. After proving it was incapable of managing its finances in a responsible way, the technology giants could be seen as somewhat of a saviour to the economy. Apple, Facebook and Google are just a few names who house a considerable base in the country. Ireland certainly has its own interests to protect.

It’s disappointing to see such weak behaviour in the face of an orange-hued, bullying politician, but at least there are some nations who are prepared to go it alone and hold the internet giants accountable to fair taxation.

Net neutrality’s last life kept intact by Supreme Court

The Supreme Court has rejected attempts by the telco industry and the Trump administration to completely erase net neutrality rules from the lawbooks.

With petitions filed by AT&T and various industry lobby groups to quash a ruling made in favour of the Obama-era net neutrality rules in 2015, a ruling which is the only glimmer of hope for net neutrality’s survival, the Supreme Court offered a lifeline. It seems rolling back net neutrality is not enough for FCC Chairman Ajit Pai, as the Republican is seemingly attempting to destroy any future attempts to reinstate the rules, which the 2015 District Court ruling holds.

While Pai and his cronies have effected taken the US back to the light-touch regulatory playing field of 2015, moves made by his predecessor Tom Wheeler to reclassify the internet service providers still stood. In passing net neutrality rules, Wheeler classified ISPs in the same league as telephony providers, and therefore under stricter regulation. This decision was upheld by the US Court of Appeals for the District of Columbia Circuit, which AT&T, NCTA, CTIA, USTelecom, and the American Cable Association were challenging here.

The presence of this case might not have any impact on the telcos today, though it would offer any future administration, who might be pro-net neutrality, a foundation to rebuilt the walls of regulation. Pai doesn’t just want to remove the rules, he wants to drive the concept of net neutrality to extinction with no prospect of return.

This ruling however, is a win for the net neutrality camp, a rare one which just might add enough momentum to sustain life until a change in administration.

“This is good news for net neutrality supporters,” said John Bergmayer, Senior Counsel at Public Knowledge, a pro-net neutrality lobby group which is also suing the FCC for the initial roll back. “The DC Circuit’s previous decision upholding both the FCC’s classification of broadband as a telecommunications service, and its rules prohibiting broadband providers from blocking or degrading internet content, remains in place.

“While the current FCC has repealed those rules – a decision Public Knowledge is currently challenging in court – this means that the previous decision is binding on the current FCC, and on the DC Circuit panel that hears the current challenge. Much of the current FCC’s argument depends on ignoring or contradicting the D.C. Circuit’s earlier findings, but now that these are firmly established as binding law, the Pai FCC’s case is on even weaker ground than before.”

The NCTA, the Internet and Television Association, is unsurprisingly miffed with the decision.

“It is not surprising that the Supreme Court declined to hear this case dealing with the Wheeler FCC’s 2015 Order,” the NCTA said in a statement. “Once the current FCC repealed the 2015 Order, almost all parties – including NCTA – agreed that the case was moot. Today’s decision is not an indication of the Court’s views on the merits but simply reflects the fact that there was nothing left for the Court to rule on.”

It seems the absence of two Republican Supreme Court judges was the deciding factor here. The newly, and controversially, appointed Justice Brett Kavanaugh removed himself from the process, having participated in the judgement of the original appeal, while Chief Justice John Roberts supposedly owns shares in AT&T.

For the pro-net neutrality supporters this was a critical win in the courts. Firstly, for the rules to be reinstated the classification as telcos as common providers is a must, though momentum was gathering for Pai and his cronies in the blood-thirsty mission.

This is not to say net neutrality camp is not without its support, but with President Trump adding his weight to the hunting trip, the pressure was starting to build. Another factor is precedent. The legal community use decisions made elsewhere in the industry for guidance, and there were a lot of decisions going against net neutrality over the last few months. Momentum was building and the issue is becoming increasingly politicised. The light was fading, though the 2015 decision being upheld is a win.

Whether this decision acts as a catalyst for net neutrality momentum and support remains to be seen, though California’s challenge to the FCC is still hanging in the balance. After signing its own net neutrality rules in State Law, despite contradictions with federal agency positions, California has decided to put the implementation of the rules on-hold until it has resolved its own lawsuit with the Department of Justice which argues the state has acted unconstitutionally.

Elsewhere around the US, various states are lining up their own, local, net neutrality rules. Washington State has already signed its own into law, while states such as Hawaii and New York are seemingly waiting for various rulings. While the approach might be broadly similar, there will be differences in each state. This patch-work of regulatory environment is something the US government is very keen to avoid, and it would turn into an operational disaster for the telcos.

In a separate lawsuit, 23 Attorney Generals throughout the US, including Maine, North Carolina, Rhode Island and Delaware, led by New York Attorney General Eric Schneiderman, are challenging the original 3-2 decision made by the FCC to roll back the net neutrality rules. The criss-cross of lawsuits, each of which relies somewhat on another decision and precedent, is starting to become complicated.

The dominos are certainly lining up across the US, each decision may send the entire stack into freefall. The weight of each ruling is getting heavier and heavier.

Verizon reworks the corporate jigsaw puzzle in the name of 5G

Verizon has unveiled a new corporate structure in an attempt to make a lean, mean, money-making machine at the dawn of the 5G era.

While many of these announcements are usually coupled with some form of job cuts, there doesn’t seem to be one in this case. We’ve been unable to locate the relevant forms on the Securities and Exchanges Commission website, though considering there have been numerous ‘streamlining’ initiatives already announced, it might be a case of fitting the business around the new headcount.

“This new structure reflects a clear strategy that starts with Verizon customers,” said CEO Hans Vestberg. “We’re building on our network transformation efforts and the Intelligent Edge architecture to deliver new customer experiences and optimize the growth opportunities we see as leaders in the 5G era. We’re focused on how our technology can benefit customers’ lives and society at large.”

The new Verizon business will be organized into three business functions (Consumer, business and Media), supported by a network and IT organization, and corporate-wide staff functions. The consumer group will feature both the wireless and the broadband business units, as well as wireless wholesale, led by Ronan Dunne, who is currently President of Verizon Wireless. The business unit will include the wireless and wireline enterprise, small and medium business, and government businesses, as well as wireline wholesale and Verizon Connect, the company’s telematics business, headed up by Tami Erwin, the current EVP of Wireless Operations. The media unit will essentially be the Oath business, with current CEO Guru Gowrappan in charge. Kyle Malady will lead the network and technology department, while there will no changes to the management team on the corporate side.

While job losses have been an unavoidable topic in the telco world over the last couple of years, Verizon made a pretty weighty announcement last month. In an effort to trim the number of lifers and dead-weight in the management layer, Verizon offered 44,000 staff a redundancy package of three weeks of severance pay for every year worked, though it is not entirely clear how many heads the telco want to count rolling out the front door.

As it stands, Verizon currently employs 153,000 people across its various markets, though this figure was as high as 183,400 in 2012. What is worth noting is that it would be unfair to point the finger of destruction at Verizon alone, the trend is clearly visible across an industry rocked by OTTs, and a North American market which has consistently and aggressively sought to undercut rivals.

With many telcos around the world attempting to take advantage of the convergence trend, perhaps this new structure will offer Verizon a leg-up. The launch of its 5G fixed wireless access business certainly gives the business something to talk about, though with both the consumer wireless and broadband units now on the same branch of the family tree, a more consolidated approach on products, tariffs and marketing can be taken. How this impacts the Verizon message remains to be seen, though an aggressive 5G assault is almost guaranteed with new devices promised over the next 12 months.

Research from RepeaterStore suggests only 41% of US consumers were aware 5G is just around the corner, and while the conversation for many telcos is now focusing on the enterprise side, in the US the 5G p*ssing contest appears to be circling the consumer. With such low consumer knowledge of 5G, the telcos will have to do a considerable marketing push to communicate the benefits of 5G.

US ups the ante on Chinese industrial espionage claims

State-owned Chinese company Fujian Jinhua Integrated Circuit Company (FJICC) and Taiwan’s United Microelectronics have been formally charged with intellectual property theft, targeting a US firm.

FJICC, which is owned by the People’s Republic of China (PRC) and part of the ‘Made in China 2025’ technology development programme, has already had it US supply chain components severed after intervention from the US Department of Commerce earlier this week, though the formality of a lawsuit escalates the conflict between the US and China further. United Microelectronics has already stated it has cut ties with FJICC, seemingly in an effort to avoid similar sanction from the US.

The lawsuit takes FJICC, United Microelectronics and three individuals into the courtroom, accused of using stolen trade secrets in the production of FJICC and United Microelectronics products. According to the lawsuit, the PRC did not possess DRAM technology prior to the events described in the indictment, though it was a segment which was identified as an economic priority. The three accused individuals previously worked at a subsidiary of US firm Micron, before transferring to United Microelectronics and subsequently setting up the relationship between the company and FJICC. At this point, the trade secrets were allegedly transferred to Chinese control.

If convicted, each company faces forfeiture, though how this will be imposed we are not sure, and a maximum fine of more than $20 billion.

“I am announcing that a grand jury in San Francisco has returned a multi-defendant indictment alleging economic espionage on the part of a state-owned Chinese company, a Taiwanese company, and three Taiwan individuals for an alleged scheme to steal trade secrets from Micron, an Idaho-based semi-conductor company,” said Attorney General Jeff Sessions.

“Micron is worth an estimated $100 billion and has a 20 to 25 percent share of the dynamic random access memory industry—a technology not possessed by the Chinese until very recently.  As this and other recent cases have shown, Chinese economic espionage against the United States has been increasing—and it has been increasing rapidly.  I am here to say that enough is enough. With integrity and professionalism, the Department of Justice will aggressively prosecute such illegal activity.”

Intellectual property theft is one of the cornerstones of President Trump’s assault on China, though taking the company to court is escalating the conflict further. After allegations of corporate espionage early this week, cutting out US components from the company’s supply chain was a logical step, though the lawsuit further compounds the battle.

The ban from the Department of Commerce is similar to the economic dirty-bomb the US dropped on ZTE earlier this year, though that only lasted a couple of weeks. The consequences of that action were clear, ZTE was also sent to keep the dodo company, though there was certainly collateral damage for US firms. Acacia Communications was one company who dependence on ZTE as a customer saw share price decline by more than 30% as a result of the ZTE export ban, though whether there are firms who are similarly dependent on FJICC remains to be seen.

The lawsuit itself represents the greater conflict between the US and China, both of which has ambitions to control the 5G ecosystem and subsequently lead the technology industry of tomorrow. Intellectual property theft is rhetoric which we have consistently heard from President Trump, though should the US prove successful in this case, it would not be surprising to see more investigations. Considering the leading positions Huawei and, less so, ZTE have crafted in the telco industry, these firms might find themselves in the crosshairs before too long.

One thing is certain, this will not be the last aggressive move towards China from this administration. If anything, this is justification for every intervention made by President Trump, think back to the Executive Order blocking Broadcom’s acquisition of Qualcomm and also the dreaded tariffs, as well as validation to accelerate towards further conflict.

“No country presents a broader, more severe threat to our ideas, our innovation, and our economic security than China,” said FBI Director Christopher Wray. “The Chinese government is determined to acquire American technology, and they’re willing use a variety of means to do that – from foreign investments, corporate acquisitions, and cyber intrusions to obtaining the services of current or former company employees to get inside information.

“We are committed to continuing to work closely with our federal, state, local, and private sector partners to counter this threat from China.”

Trump set sights on spectrum strategy

US President Donald Trump has unveiled plans to create a National Spectrum Strategy to prepare the country prepare for the introduction of 5G wireless networks.

The presidential memorandum, which was signed last week, directs the Secretary of Commerce to work with agencies and policy makers on all levels to develop a National Spectrum Strategy. As part of the strategy, the Secretary of the department will report annually to the President on efforts to repurpose spectrum, while a Spectrum Strategy Task Force will also be created which, including representatives from the Office of Management and Budget, the Office of Science and Technology Policy (OSTP), the National Security Council, the National Space Council, and the Council of Economic Advisers.

“American companies and institutions rely heavily on high-speed wireless connections, with increasing demands on both speed and capacity,” the memorandum states. “Wireless technologies are helping to bring broadband to rural, unserved, and underserved parts of America. Spectrum-dependent systems also are indispensable to the performance of many important United States Government missions. And as a Nation, our dependence on these airwaves is likely to continue to grow.”

Within 180 days, executive departments and agencies are required to report to the Secretary of Commerce on their anticipated future spectrum requirements, while the OSTP shall submit a report to the President on emerging technologies and the expected impact on spectrum demand. Once these reports have been submitted and assessed, the Secretary of Commerce will have to brief the White House on the status of existing efforts and planned near- to mid-term spectrum repurposing initiatives, as well as a long-term National Spectrum Strategy that includes legislative, regulatory, or other policy recommendations to rework the approach to spectrum management.

While work on spectrum has been underway for some time, this intervention from the White House demonstrates the importance of 5G to the US economy, and perhaps its long-standing battle with the Chinese to maintain control of the global economy.  Although Silicon Valley still maintains the leadership position on the worldwide technology and telecommunications industry, this grip is not quite as ironclad as it was in previous years. With digital taking over in the cockpit as the driver for almost every ‘developed’ economy around the world, a flexible, future-proofed spectrum policy is critical.

“We commend the administration for recognizing the importance of establishing a national spectrum strategy,” said CTIA President Meredith Baker. “With the right approach based on licensed wireless spectrum, America’s wireless carriers will invest hundreds of billions of dollars and create millions of jobs to deploy next-generation networks and win the global 5G race.”

“Spectrum has become one of the most critical inputs for the communications and information technologies that are driving America’s economic growth,” a statement from the NCTA reads. “The services that rely on unlicensed spectrum alone generated more than $525 billion in value for the U.S. economy in 2017. We look forward to engaging in constructive dialogue with the White House, NTIA, and the FCC on the development of a balanced national spectrum policy that will meet the growing need for both licensed and unlicensed spectrum to support next-generation wireless technologies.”

The attention from the White House will certainly be welcomed by the industry, though some have questioned why it has taken so long. With the Trump administration focusing on other areas, in particular looking outwards, some critics have questioned why it has taken so long for the White House to take a firm position in the 5G world. Democrat FCC Commissioner Jessica Rosenworcel is one who has questioned the sluggish nature of the administration, particularly focused on reports and action, suggesting it has allowed other countries such as China and Korea to steal valuable yards in the 5G race.

While specifics are relatively thin for the moment, the spectrum strategy might go some way to settle bickering in the industry. A good example is the battle between the autonomous vehicles camp, which is currently guarding largely unused spectrum reserved to allow vehicles to communicate, and telcos who want the assets opened up for wifi. This is only one example, but without a comprehensive, forward-looking, strategy in place, these arguments will not be settled.

Such a policy will provide much needed clarity in the industry, though six months is a long-time to wait with the 5G world fast approaching.

T-Mobile US finds a new way to troll AT&T and Verizon

T-Mobile US is testing out a new way to mock AT&T and Verizon by inviting the duo to its own TEX Talks seminars and panels on how to improve customer service.

Taking place on 24-25 October at its Charleston customer experience centre, T-Mobile US will host various companies from around the US, offering advice on how to improve relationships with customers and reduce churn. Of course, never missing a chance to poke fun at AT&T and Verizon, CEO John Legere has made it clear they are invited to the event, even if they are currently ignoring his calls.

“As the Uncarrier, we’ve always been about changing this industry for good…with Team of Experts, we’ve done it again,” said Legere. “And we won’t stop with wireless. Customer service is utterly broken in this country – it’s a mechanized mess. We’ve completely changed the game for customers, and we hope every brand steps up to do the same.”

While Team of Experts might not be the most exciting of Uncarrier moves, it certainly seems to be having a notable impact on the business. T-Mobile US has stated Net Promoter Score (NPS) is up 60% since introducing the new focus on customer service, while asynchronous messaging with care is up 34% and churn of customer service staff is down 48%. It’s not the headline grabbing Uncarrier move of yesteryear, but goods things are happening.

Announced back in August, the aim of the Team of Experts Uncarrier move was to revamp customer services and improve loyalty. The industry has come to expect big things from wild-eyed Legere when launching new Uncarrier moves, though this is not exactly the blockbuster we’ve gotten used to. However, three months on, the ‘rock star treatment’ for customers does seem to be working.

It might not be the venture into the world of content many were expecting, though it is a welcome surprise. The telco industry is traditionally awful at customer services, choosing to lock in customers with long contracts and create a red-tape maze for those who want to leave. Loyalty was enforced by making churn so difficult as opposed to creating a proposition customers want to be a part of. This move seems to be challenging the status quo.

Customer services can be a differentiator moving forward as the price wars seem to have come to a conclusion. There will continue to be undercutting and promotions, though the telcos cannot go much lower on tariffs and maintain the profit margins desired by investors. T-Mobile US has done a great job of disrupting the industry and capturing subscriptions, but momentum will run low if the same message is played on repeat.

There has been signs across the world telcos are starting to care more about their customers, Vodafone is a great example in the UK with its own customer services initiatives, though these are still the exceptions not the rule. More work needs to be done to correct years of wrong-doing.

That said, Legere’s trolling is always a bit of fun.

Legere casts wild eyes over to the world of banking

SEC-filings have emerged suggesting T-Mobile US is looking into creating a banking product for its customers which could be launched in a matter of weeks.

The documents, which have been filed by Customers Bancorp, describe a partnership which has been in place since September 2016, with the two parties coming together to build the relevant technology and products since. Details are relatively thin on the ground as it stands, though in naming T-Mobile in the documents it is a pretty sure sign of diversification from the telco.

With more customers showing readiness to adopt mobile banking solutions the idea does make sense. T-Mobile US is constantly looking for new opportunities to laud over the ‘duopoly’, as CEO John Legere describes AT&T and Verizon, so it should come as no surprise the team are looking for new ways to engage customers.

Although T-Mobile US would not be considered a challenger brand in the same way as Iliad in Italy or Jio in India, the shake-up of the business under Legere’s leadership has created a similar disruption. T-Mobile US has continuously boasted of collecting new customers with ease quarter after quarter, but such momentum can only last so long; new ideas are needed.

In India, Jio has diversified into content and also hinted at an assault on the broadband market, though T-Mobile US has resisted such pleasures to date. The introduction of financial services is simply another tool in the shed for T-Mobile US to maintain its current course. The last few Uncarrier moves have not been the earth shakers of yesteryear, though this would certainly capture the attention of the masses.

With a huge customer base, 73 million subscribers, and a sound relationship with said customers, churn was 0.95% during the last quarter, the foundations are steady. However, the big question is whether the T-Mobile US brand, led by the eccentric and wild Legere, can present itself as a business in which consumers would be confident in dealing with for their finances.

Banks do not generally present themselves as fun or charismatic brands mainly because dealing with an individual’s money is a serious matter. People will want their cash handled by a man who looks like a stereotypical accountant, not a 40 year-old frat-boy. This is perhaps one of the issues T-Mobile US will have to assess, as Legere does not give the impression of the most trustworthy banker.

US consumers apparently not that bothered about 5G

As 5G is all the US telcos can talk about right now, you would be forgiven for assuming consumers are just as excited, but it appears the feelings are little more than ‘meh’.

According to new research from Repeater Store, consumers just aren’t that bothered by the upcoming wireless revolution. In fact, most aren’t even aware of the work which is being done across the country.

59% of the respondents to the survey didn’t know that 5G is around the corner, though T-Mobile US subscribers were the most clued up which is perhaps unsurprising considering the eccentric narcissist currently in-charge. In terms of understanding the benefits, 28.1% said they were not clear at all, while 27.5% said they were somewhat clear and 23.2% said they sort of understood the added value. In terms of excitement, 18.5% couldn’t care less and 19.6% aren’t really excited. 32% are in the ‘meh’ camp, while the rest are more pleased with the upgrades.

While there are clear benefits for the industry and apparent excitement for vendors, almost the complete opposite can be said for consumers. To date, the limited communications on 5G have focused on increased speed on mobile devices, though most of the time, a 4G connection is more than sufficient to watch videos, play games or check your bank balance. Perhaps in the eyes of the consumer, the telcos are trying to fix a problem which doesn’t exist.

Consumers do not know about the stress being placed on networks, nor are they likely care that much either. Telcos can promote the long-term benefit of 5G due to the increased efficiency of data delivery, but as long as the experience is good enough today, few consumers will actually care about these messages. Strain on the network is the telcos problem not the consumers, they don’t pay to be concerned about the piping.

Perhaps the issue is the telcos haven’t been discussing the most relevant usecases enough. The fixed wireless access usecase is certainly an interesting one, and an area which can be communicated to the consumers as an immediate benefit of 5G. According to Repeater Store, although only 17% of consumers would sign up to a 5G FWA subscription today, 75% would be open to the idea. This of course will be determined by the experience, and so far, there is still a lot of work to do.

The majority of survey respondents stated 4G signal in their homes was nothing more than average right now. 40.8% of AT&T subscribers described their experience as excellent, while it was 49.7% for Verizon, 42.3% for T-Mobile and 30.2% for Sprint. These are the customers which are perfect to sell 5G FWA to, though for the offering to be a genuine success, the number of 4G satisfied customers will have to be higher. Part of the buying decision for 5G FWA will be based on the experience of 4G signal in customer homes; it’s not a bad start, but certainly more work needs to be done.

One of two conclusions can be taken from this research. Either, the telcos need to do a better job of telling consumers about the benefits of 5G, or, the consumers simply aren’t bothered by what the telcos have been saying so far. If the former is correct, expect more marketing dollars to be spent, but if it is the latter, the industry will have to more away from the ‘faster is better’ approach to advertising which has dominated for years.

We suspect it is a bit of both. In the rush to bring services to market, US telcos might not have had the time to tell the full story about 5G. This is something which can be developed over time. Another area worth considering is whether we need faster? We are struggling to think of many cases when a stable 4G connection is not good enough for content to work effectively on devices, raising another question; if 4G is fast enough right now, why do we need better?

There are other benefits to 5G, FWA is an excellent example, especially in the US. Though it does appear the telcos just need to get better at explaining the benefits and potential usecases, instead of lazily falling back into the same routine of ‘our network is faster than everyone else’s’.