Last week marked the one-year anniversary of the close of the T-Mobile/Sprint merger. The deal itself has had important ramifications for the industry: entry of DISH as a fourth facilities-based player; a recasting of the MVNO/prepaid competitive landscape; and undoubtedly influencing all operators’ CBRS and C-band auction strategies. How should we grade New T-Mobile so far? What have been some of its key successes? Disappointments? Areas for Improvement? Here’s my report card on New T-Mobile’s first year, concluding with a list of what I believe its priorities should be for Year Two.
Key Successes
You might think we should grade T-Mobile on a curve, given all it had to do during a time of Covid disruption. Huge kudos are due to the T-Mobile team for what it was able to accomplish during this extraordinarily unusual year.
Network. Neville Ray and the network team pretty much hit plan -- no small feat in the midst of a pandemic. It rolled out coverage 5G near nationwide, and the more game-changing mid-band 5G to more than ⅓ of the U.S. population. It also did a better job than Verizon and AT&T in properly framing the various flavors of 5G, using the new Magenta Max plan to signal its near-term competitive strength in capacity.
Sprint Integration. The experience of onboarding Sprint customers to the T-Mobile network has been fairly seamless. There is still some back office stuff that needs fixing and smoothing; these are not one-year projects.
Spectrum/Auction Strategy. Charlie Ergen has the reputation for being an expert poker player. But it was T-Mobile that beat its rivals at the game of Spectrum Auction Hold ‘Em. It stayed in the C-Band auction long enough to ensure Verizon and AT&T had to bid sky-high to get that much-needed mid-band spectrum. The banks now financing those spectrum purchases should send T-Mobile a thank-you note. Another thank-you note is forthcoming from Elliott Capital Management, since AT&T’s auction spend forced it to sell DirecTV.
Privacy/Security. T-Mobile is positioning itself as somewhat of the Apple of the telecom industry, with the Scam Shield service that offers [some] protection from scams and robocalls. Nobody believes this will be the Pfizer vaccine equivalent of unwanted calls. That industry spawns mutations with Covid variant-like efficiency. But we’ll take 70% efficacy!
Disappointments
It’s 2021. Everyone gets a medal. So we won’t use the word "failure."
Un-Carrier Moves. A bit of the brashy boldness edge is off. No particularly bold moves here. Why? Could be a mix of the departure of John Legere and installation of the more operationally oriented new CEO Mike Sievert; a bit of big company it-is; and the fact that much of the disrupt-the-industry low hanging fruit has already been picked off. Now, there is an Uncarrier event scheduled for April 7, and methinks it will be about home broadband. I’m looking forward to seeing what T-Mobile’s play is here.
TV. They tried to put lipstick on a pig last week when the folding of TVision was wrapped within a larger announcement with Google. But, dating back to the acquisition of Layer 3 in 2018, this wasn’t a good idea to begin with. T-Mobile entered an already crowded landscape with a product that was not unique or best-of-breed in any way, and was woefully naive about little things such as content rights fees. The cable-opoly was not disrupted (at least by T-Mobile), and it won’t be by the Philo/YouTube version announced last week.
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Some Unfinished Aspects of the Sprint Integration. We’re still a bit in the dark on some of this. The retail piece still remains very much a work in progress, though to be fair the pandemic has thrown a major wrench in this. T-Mobile is also now in a tiff with DISH about the 3G shutdown...an early indication that these companies are likelier to be frenemies than lovebirds over the next few years. And how will T-Mobile ultimately onboard the remaining Sprint customers using increasingly outdated devices?
Areas for Improvement
Enterprise. T-Mobile has only 9% share in this segment and faces an uphill battle. I believe they need to have a successful enterprise business to be successful in 5G. T-Mobile’s moves in 2020 are indications that it at least intends to play here. But we need more here on how the sausage is being made. AT&T and Verizon have big enterprise sales teams, sophisticated platforms and deep partnership integrations. We need to understand the extent to which T-Mobile plans to match this or otherwise differentiate.
Coverage. Still lots of work to do to improve coverage outside major metros and to be competitive with AT&T and especially Verizon. My regional pandemic lockdown in New England, which resulted in lots of time spent in Maine, New Hampshire and Vermont is testament to this.
Home Broadband. This was something promised to the FCC/DOJ as part of the Sprint deal. And T-Mobile has been seeding the market with trial units. It’s not MVPD, but this space is tougher sledding than many believe. Just ask the WISPs, Verizon, AT&T and Starry. I’m of course interested to see how T-Mobile plans to attract its stated objective of 7-8 million customers over the next five years (itself not a particularly ambitious objective). My view: it’s gotta guarantee 25 Mbps or better, and support 500 GB/month of usage, for less than $50 per month (I’d love to see it under $40 for T-Mobile subs).
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Year Two Priorities
Like any good report card, here are some things I’d like to see T-Mobile work on in the coming year.
5G Apps and Business Cases. T-Mobile has a 12-18 month lead in 5G, until Verizon and AT&T start catching up in mid-band (and deploy more mmWave). This is a good opportunity to get customers to upgrade to 5G phones and lock them in for a couple of years. But it needs more than the "we won’t throttle you" bennies of Magenta Max to encourage customers to drop an extra few hundred on a new 5G phone. This is fertile ground for their enhanced relationship with Google. I suggest they spent time on this, rather than more mucking around with TV.
IoT. T-Mobile knows it has an opportunity to grow share in the enterprise space, and is humble enough to define "success" as going from 10%-20% share over five years. Lost in the enterprise message, however, is IoT. This space has been a roller coaster over the past few years for T-Mobile. Sprint actually had a nice little IoT business and a quite sophisticated platform. It’s a Curiosity™ where that ends up.
Google Deal. This one’s interesting. We’ll know over the next 12-18 months whether this partnership is the real deal. If the cards are played right, this can be significant. On the phone front, Verizon has done a crummy job marketing Google devices. Can T-Mobile do better? And will Google give them enough to work with? Can T-Mobile thread the needle of being successful with Google while not burning bridges with Cupertino? There is a moment-in-time opening for a vendor to take some smartphone share in the U.S., what with LG exiting the market and Chinese phones all but banned here.
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I’m also potentially excited about RCS. Not that any T-Mobile customers are rushing down to the store asking “where can I get me some of that RCS,” but there is room for competition, innovation and growth in this space. It also gives T-Mobile an entree into some of the enterprise relationships that could help it grow that side of the business.
Mark Lowenstein, a leading industry analyst, consultant, and commentator, is managing director of Mobile Ecosystem. Click here to subscribe to his free Lens on Wireless monthly newsletter, or follow him on Twitter at @marklowenstein.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceWireless staff. They do not represent the opinions of FierceWireless.