Sky becomes first MVNO to join the UK 5G race

Sky has become the first MVNO in the UK to join the 5G race, making use of the O2 network.

While Sky Mobile is little more than an ‘also-ran’ at the moment there could be some potential for the brand to cause headaches for the established players, both MNOs and MVNOs. As the leader in the UK premium content market and a healthy broadband business, there certainly are some gains to be made in terms of convergence.

“We will be the only mobile operator to be able to combine the launch of next generation superfast 5G connectivity with Sky Mobile’s unique features including Roll, Swap and Watch,” said Sophia Ahmad, Commercial Director of Sky Mobile.

All of Sky’s current data plans come with the Roll feature, allowing any unused data to be rolled into the next month, while Swap will allow any consumer to upgrade phones without changing contract. The Huawei Mate 20 5G X and Samsung Galaxy S10 5G will be available to customers in November, the target for the 5G launch.

“The mobile network operators need to watch out as this move poses a considerable threat,” said Paolo Pescatore of PP Foresight.

“It is becoming harder for telcos to differentiate on connectivity beyond price alone. Sky armed with its innovative mobile features and breath of content is very well placed to compete head on. For now, from an overall services perspective it seems to be in pole position.”

As we have mentioned before, the success of 5G will largely be reliant on the experience offered to customers as well as the price and value-add services. Relying on O2’s network to deliver its 5G offering might prove to be a weakness for Sky as the MNO has regularly featured at the bottom of rankings when it comes to customer experience.

Interestingly enough, this could create an entirely new dynamic in the connectivity segments.

Sky is not primarily a mobile business and never will be. Its mobile offering is an element of the wider convergence strategy to attract and retain customers, therefore profitability on connectivity is not the only concern. It will be a consideration for the management team, but lower margins can be accepted if there is a greater gain in the bigger convergence picture.

Traditional players have been trying to shift away from being overly reliant on mobile revenues for years, with some success stories but most of the time a maintenance of the status quo. As Sky profits are not primarily reliant on mobile a potential loss-leader position could be created to cause havoc and grow profitability in other business units as well as the overall Sky business.

With all four MNOs and now Sky to offer 5G services to consumers by the end of the year, the UK is set to become one of the most interesting markets to watch worldwide.

Queen Liz set to live-stream and monetize Prince Phillip

Tired of having to explain why Prince Philip keeps offending people and cultures, Queen Elizabeth is said to be setting up an OTT live-streaming service to monetize the gaffs.

In between impressions of Colin Macrae, Prince Philip, the Duke of Cambridge, is well-known for unintentionally insulting anyone who didn’t gain at least three O-Levels from Eton or Harrow. According to sources, Queen Elizabeth has decided to mount the latest Go-Pro on her husband, which will be then live-streamed through a currently unknown website, with subscribers only having to pay £2.99 a month.

“Her Majesty wants to demonstrate she is more than just the Head of State,” said Dennis, a Buckingham Palace insider. “After 92 years, Her Majesty wants to demonstrate to the people of the UK and the world that she has excellent business acumen. We expect thousands of people to sign up almost immediately, such is the prominence of Prince Philip’s comments.”

Although unconfirmed, the Palace is reportedly in discussions with several telcos around the world, many of whom are seeking exclusive rights for a zero-rating offer. The UK telcos are bidding particularly aggressively, with EE reportedly the keenest, sniffing out a bargain to continue building its content platform. Insiders at Three suggest it wants the right to be the focal point of a new campaign which will be know as ‘Go Groan’.

“Video is constantly being hyped nowadays, and the Royal Family members are constantly sending cat and rugby memes to each other,” said Dennis. “The Queen published her first post on Instagram in March, during a visit to London’s Science Museum, and now she’s hooked. She sees this platform as a great opportunity to make some extra money off her husband’s personality. Those corgi’s go through a lot of doggie biscuits.”

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Three Denmark pushes carrier billing as value add

Cutting through the competitive chaos can be a difficult task, and while Three UK is focusing on convergence and broadband, Three Denmark is making a play to manage the consumers wallet.

With mobile services becoming increasingly utilitised the telcos need to search for a new way to stay relevant and add value to the consumer. Some are diversifying into alternative connectivity services or content, but other are broadening their wings outside the traditional realms of telecommunications.

“It can be difficult to keep track of how many different small amounts you are allowed to spend on apps, movies and games – or how much you get used during a month,” said David Elsass of Three Denmark. “Therefore, many of our customers, both with and without children, have sought greater overview.”

Many telcos have created a very unique position of trust with the consumer. Some might begrudgingly plug credit card details into the Google or Amazon matrix, but almost every consumer trusts their telco to manage their financial details effectively. With more services becoming online-first, or at-least digitally-orientated, a telco can bridge the gap in trust, allowing sceptical consumers to interact with the digital economy.

This is the niche which Three Denmark is looking to fill. Through 3Payment, customers will be able to pool all Apple, Google and Microsoft purchases into their phone bill, streamlining the increasingly fragmented digital economy.

According to a report from DIBS Payment Services, the Danes spent over 20 Danish Krone (roughly £2.3 billion) on online services and subscriptions. As many of these providers are making it so easy to purchase services, keeping track of total spend can be a complicated process. The 3Payment will not only streamline these payments into a single point, but also give the user the option to limit spending.

Three is not necessarily following the status quo in creating additional value to customers, but this is a very interesting approach. Unless the telcos offer something different to consumers, there is a very real risk of walking the path to utilitisation.

One of the main reasons we like this initiative is Three is attempting to add value to the ecosystem in an emerging segment, leaning on one of its attributes. This isn’t an example of a telco attempting to muscle into a competitive segment which is dominated by traditional players which have very different business models, like content, which we see as risky.

Three is leveraging a strength which it has, the trust relationship between it and the consumer, and tackling a pain-point in the digital economy. Simple, forward-looking and innovative.

Legere gives up the weird and wonderful for loyalty-focused Uncarrier move

Revamping customer services and launching a loyalty programme might be very intelligent plays by T-Mobile, but it isn’t quite the grandeur of kick-starting an assault onto the TV content market.

Whenever CEO John Legere pulls on the magenta t-shirt, applies the gallons of mousse to the hair and presumably drinks 15 shots of espresso to get the authentic wired look, the industry has come to expect big, disruptive and combative things with Uncarrier announcements. The latest ‘challenge’ is somewhat more traditional than we are now used to as the norm with the eccentric CEO.

Back in January, when T-Mobile US completed the acquisition of Layer3 TV, it paved the way for the magenta army to tackle the convergence market. T-Mobile has been promising a disruptive TV service and is yet to deliver. When Legere decided to stoke the fire of excitement by telling us the next Uncarrier move was coming this week, assuming it would be the TV embrace would have been a fair bet. The reality is functionally a great route for the business, but it isn’t anywhere near as stimulating as what we imagined, even if Legere does his relatively-shallow excitable-puppy routine.

The banner for the new initiatives is ‘Rock Star Treatment’, which does seem to be a rip-off of the Virgin Atlantic adverts of yesteryear. The first prong will be to revamp the customer services operations, creating a proposition where the customer feels valued. Despite Legere claiming this is disruptive, it is something which should have been done anyway. The song-and-dance surrounding the upgrade just illustrates how little telcos think of their customers in the first place. Secondly, the loyalty programme is very similar to the proposition which O2 has built in Priority. It’s a very effective loyalty programme for O2, so we have no issue with Legere ripping off the UK market leader.

“Our customers get treated like rock stars with Team of Experts, and we believe they ought to be treated like that everywhere they go,” said Mike Sievert, COO at T-Mobile US. “Music connects us, so we’re connecting our rock star customers with exclusive magenta extras at Live Nation events and with Pandora. Now, when they turn on their tunes or head to a show, they’ll get an elevated experience, just for being with T-Mobile.”

On the customer services side of things, the T-Mobile Team of Experts has been launched nationwide which promises no robots or automated phone menus, and a dedicated customer services representative who will be assigned to a customer. As part of the initiative, Legere has promised you will talk to an actual person, no bouncing from department to department, 24/7 call centres, call-back features will be introduced and integration with Alexa or Google who will be able to assist negotiating the beige maze.

Some of these features are welcome additions to the customer services mix, while other are something the telco should have been doing anyway. Although this is hardly the most exciting aspect of the communications world, it is a critical one. Telcos who take customer services seriously are the ones who have the lowest churn and highest Net Promoter Score (NPS). Many business experts will tell you it is more profitable to keep current customers happy that constantly chasing acquisitions to replace the churn. It seems like an obvious thing to say, but with the attitudes of the telcos, you wonder whether it has hit home. T-Mobile is seemingly making efforts to improve here, and the second aspect of the Uncarrier launch will also add to momentum.

The second aspect is a loyalty programme. Here, a partnership with Pandora will offer Uncarrier customers a year-long Pandora Plus subscription, and through a tie-up with Live Nation, will have exclusive and early access to gigs, as well as discounted tickets. This is an approach to retention and rewarding customers which we really like and smells very similar to O2’s strategy.

When looking at free value-adds for customers, some telcos look at big ticket items like sports. While this might attract certain customers, the risk is there is little interest from others. A focus on music offers breadth and accessibility. With Pandora, customers can choose their genre, or tap into alternative content such as podcasts and radio stations. It offers something for everyone. With the Live Nation tie up, this is relatively risk free as it gives the consumer the choice of what to purchase. T-Mobile is offering value to the customer through discounts and early access, though it is placing the financial commitments on the consumer. They choose what they want, but are receiving value through being a T-Mobile customer.

Overall, this is an alternative approach to convergence. The ventures into content are not to generate revenue directly through increasing ARPU, but focused on retention of customers. Offering value-adds for free makes the customer feel rewarded and an indirect boost for the bottom line. Securing customers for the long-term is an excellent way to improve profitability, and a better relationship with customers will only create more brand ambassadors.

While this is not the devilish and enticing Uncarrier move which we have become accustomed to with Legere and his wild eyes, it is a pragmatic business strategy to secure the user base and improve the foundations. If T-Mobile US can take it retention capabilities up to the same level as its subscriber acquisition, the duopoly might not be that far on the horizon after all.