T-Mobile gaining business customers thanks to expanded LTE footprint

T-Mobile US (NYSE:TMUS) is seeing strong momentum in its sales to small businesses, in large part because of its expanding LTE coverage footprint, according to a T-Mobile executive.

T-Mobile's LTE network now covers 302 million POPs, and its 700 MHz A Block spectrum for LTE has been deployed to 176 million POPs. T-Mobile has said it intends to add 1 million square miles to its LTE coverage footprint in 2015 by year end. T-Mobile CEO John Legere said in September the carrier would continue to bring LTE coverage to around 260,000 homes every single week for the rest of the year.

In an interview with FierceWireless, Mike Katz, T-Mobile's senior vice president of marketing, brand and acquisition, said that the expanded footprint "certainly has gotten us access into companies we couldn't sell to before."  

"Not just because their companies are physically located in a new part of our footprint, but for whatever business reasons they had, there were parts of the country that they travel to that we didn't work in but we now work in," he said.

Katz said a great example is Minneapolis. When T-Mobile deployed its 700 MHz spectrum for LTE in Minneapolis, it improved the size of its network in square miles in Minnesota by five times. "There's a number of new small business deals that we won in that market because you have so much travel from that core, central Twin Cites urban area up north into the lakes areas," he said.

"That was a huge boon for us, both in the consumer as well as in the B2B business," Katz added. "It's definitely opened up a lot of new selling opportunities, again, not just because companies are geographically located in areas that are covered. The opportunity for us has been companies that were already in our footprint but had employees or other business needs that were outside of our footprint now being covered."

T-Mobile's LTE CellSpot product, which it rolled out earlier this month, has also been "extraordinarily popular with small businesses as well." T-Mobile describes the new CellSpot as an "LTE mini-tower -- with low power settings for indoor use," and claims it can provide an average of 3,000 square feet of coverage for homes, small businesses or other areas. The LTE CellSpot is available free of charge to "Simple Choice" postpaid customers, who need to make a $25 refundable deposit that they can get upon returning the device. Katz said small retail businesses or businesses with small offices can use the CellSpot to improve coverage.

The 700 MHz spectrum has also improved T-Mobile's in-building penetration, which has helped it in the enterprise market. "In Denver, for instance, we saw over 50 percent in-building coverage improvements in the front-range metro area in Colorado and you're seeing similar stories across the country as that 700 is full deployed," Katz said.

In March T-Mobile rolled out its plan to attack the business market, which is dominated by Verizon (NYSE: VZ), AT&T Mobility (NYSE: T) and Sprint's (NYSE: S), at its "Uncarrier 9" event. The company unveiled new plans to businesses that it said would make things simpler for them to get wireless service.

Last week T-Mobile revamped its plans for business lines and made it simpler. Customers start with 2 GB of LTE data each per line, up from 1 GB before, with no change in cost. T-Mobile charges $160 for 10 lines with 2 GB of data each totaling 20 GB of LTE data. Every additional line after 10 is now $15 per line. For large enterprises that spend more than $15,000 per month with T-Mobile, the carrier offers a flat 15 percent discount on core service costs, Katz said.

"What we've seen since Uncarrier 9 is an unprecedented, record growth for us in business," he said. "And certainly small business is disproportionately represented there." The carrier's small business sales have grown by more than a factor of two since March, he said, declining to provide more specifics.  

"But we've also seen a good deal of success on the enterprise side, particularly in the large enterprise side, who I think also we struck a chord with how simple and transparent and competitive our proposition was for them," he said. T-Mobile now does business with 33 percent of Fortune 500 companies, Katz said. "We've won a lot of new brands in the Fortune 500," he added.

Legere said in late October that in the third quarter T-Mobile's postpaid porting ratio for its consumer wireless business was 1.33 with Verizon, 1.98 with AT&T and 2.09 with Sprint (meaning, for every one customer T-Mobile lost to its competitors, it gained those figures in return from them).

"We actually see disproportionately high porting ratios in business as well, higher than what we see in consumer," Katz said as a way to illustrate the company's momentum in the business market without divulging specific customer figures. "For every T-Mobile business customer that's leaving, we're seeing higher than what you see in consumer switch over to T-Mobile."

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