Verizon and AT&T may have the numbers, but T-Mobile is really the market’s leader thanks to an inability for rivals to stay focused on operations.
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If we can glean anything so far from the latest quarterly results from the nation’s three largest wireless operators it’s that one of them is not like the other.
That one would be T-Mobile US, which continues to be laser-focused on gaining as many new smartphone customers as possible. The others would be Verizon Wireless and AT&T Mobility, which while still saying they are interested in those high-valued “traditional” wireless customers appear to be more focused on just about anything else.
Quick overview: T-Mobile US added significantly more new smartphone connections during the final three months of last year – and for the whole year for that matter – than its larger rivals. And it wasn’t even close.
Sure, Verizon Wireless and AT&T Mobility did manage to attract new connections to their networks, but the real growth has come from channels that typically do not produce the sort of monthly revenue it would seem to be needed to power a full-fledged wireless network.
Now, in somewhat condemning what Verizon Wireless and AT&T Mobility are doing, it needs to be noted that both are still raking in billions upon billions of dollars offering up services their customers can’t seem to get enough of using technology that 20 years ago would have seemed to be 100 years into the future.
But, it would appear that their focus on the heart of the telecommunications space is beginning to wander.
AT&T, for instance, has been branching out all over the place in recent years, first with its purchase of DirecTV, snapping up carriers in Mexico and more recently with its plan to acquire Time Warner. Company management seems to indicate that at some level mobility is in the middle of all this chaos, but the meaning of mobility looks to be changing.
The same can be said for Verizon Wireless, which has seen its parent company snap up AOL, find itself in some sort of dance with Yahoo and is now rumored to be in talks with one of the large cable television providers. All the while its bread-and-butter wireless service has long ago lost its position as the industry’s bellweather in terms of growth and prosperity.
I get that in this new day and age of over-the-top competition and just about anyone with a billing system looking to offer customers a wider package of services that some feel if they are not getting larger they are getting smaller. But, it’s odd that carriers of this size can’t also remain focused on maintaining growth in the traditional mobile segments.
Of course, that would be easier if T-Mobile US were not being so aggressive in terms of targeting that high-value, smartphone market. The carrier has managed to take what was a position of weakness just a few years ago and turn it into an operation that is stealing customers from rivals at will.
In fact I would have no problem with those stating T-Mobile US is really the domestic market’s leading wireless provider in that it has become the stick stirring the drink. Just about every move from a rival has been a reaction to something T-Mobile US did or was about to do, and that sort of influence is the mark of someone driving the boat.
And what’s better than being on a boat?
Now, some might argue that T-Mobile US has become so focused on one market segment that it has done little in penetrating new avenues that are seen as the “future” of mobile. That would indeed seem to be a true statement and could spell trouble for the carrier down the road.
And that might just be the rub in the whole situation. T-Mobile US might not really care about “down the road” as it figures if it manages to do enough good things in the near term its long term is likely to include new owners.
It sort of reminds me of how Nextel Communications operated prior to being acquired by Sprint. Nextel was like a metronome in attracting around 500,000 of the market’s highest valued enterprise customers every quarter for years. You could almost set your clock to it: 2 million net adds per year, with each customer paying $60-plus per month for service.
But, in the background rivals were beginning to roll out services that undercut Nextel’s bread and butter (push-to-talk services) while also focusing on new market segments that were just beginning to gain momentum. Nextel’s short-term future still looked strong when it was acquired, but cracks in that foundation were becoming apparent.
Does this mean T-Mobile US is set to follow in the footsteps of Nextel in becoming another interesting tale to tell our younger coworkers? Place your bets.
In the meantime we get to witness an ongoing game of one operator sticking out from the pack by sticking with a model focused on the heart of the market, while the other two go in search of something new.
Thanks for checking out this week’s column. Here’s a quick extra to get you through the weekend:
–Speaking of a wavering focus, Sprint this week moved to acquire a 33% stake in online music service Tidal for a reported $200 million.
In touting the deal, Sprint said it’s gaining exclusive access to some of Tidal’s content, which I guess could be appealing to Sprint customers that like that content. Tidal itself is a bit of an unknown quantity in terms of performance in the highly competitive streaming music space, with some reports noting the company had just 1 million paying customers at the end of last year.
I guess it’s nice to see Sprint feeling enough confidence to plunk down $200 million for a piece in a streaming music service, but it does seem a bit strange on the outside for a carrier that just a year ago was counting coffee cups.
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