Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
T-Mobile US has a bit of history poking its rivals with new offerings that it tends to overhype a bit in terms of their consumer friendliness, but which have indeed the way mobile carriers market products and services. These bits of fun have come under the carrier’s “Un-carrier” tagline, though make no mistake T-Mobile US remains a carrier.
I have used this column to go in-depth on these initiatives, even going so far as to rank their awesome-ness. (People love lists!)
This past week, T-Mobile US unveiled its “X” un-carrier move with the launch of its very American named Binge On service. The offering, which officially launches to the public on Nov. 15, provides customers on the carrier’s Simple Choice postpaid plans and with data buckets of at least 3 gigabytes per month to stream video content via their cellular connection from their subscriptions to more than a dozen video services, including HBO Go, Netflix and Sling TV. Even, better that list of supported video providers includes Verizon Wireless’ recently launched Go90 and AT&T’s DirecTV streaming service, because T-Mobile.
While I have been a fan to varying degrees of past “Un-carrier” initiatives, this one might just be my favorite. And, not because I am one of those consumers that loves to binge watch television series’ both awesome (Twin Peaks) and not (Walking Dead), but because this initiative could cause the actual wireless telecom market to explode.
That’s right, explode!
You see, until this announcement, mobile operators have been trying to get a handle on growing consumer interest in streaming video content, which is seen as a real bear for mobile networks to handle. These efforts have included ditching unlimited data plans, jacking up the price on unlimited data plans and purposely strangling the data speeds in which consumers can view video content via a cellular connection in an attempt to get them to stop. For the most part, these efforts have worked as fewer customers remain on unlimited data plans and in general hordes of people are not sitting around streaming video content via their cellular connection for fear of overages or because of horrible network quality.
Now, T-Mobile US is tackling this challenge head on by not only not throttling streaming video usage, but by not having that usage count against a customer’s data allotment. Wait, T-Mobile want’s customers to clog its network with Walking Dead marathons?
In making the announcement, T-Mobile US CEO John Legere said he was more than confident the carrier’s network could handle the load and with the work T-Mobile US CTO Neville Ray has done with the carrier’s network, who am I to argue. Sure, T-Mobile US is going to throttle the video quality of this “free” streaming service to just 480p, but that’s probably still good enough. Plus, this allows T-Mobile US to control the video streaming quality of its customers as opposed to the current model where customers most likely pick the highest video quality regardless if they really need it.
I also suspect most consumers will still leave their serious binge viewing for when they are at home where they will more than likely have a Wi-Fi connection, or will continue to use their current tablet device of choice for such viewing that is more than likely Wi-Fi only.
But, that’s not really the point. What T-Mobile US has done is jump into the cage with a live bear. And, I am not sure it has a safe word.
To this point, T-Mobile US’ rivals have countered the “Un-carrier” moves to one degree or another. But, this move might be a step to far.
Already, some carriers are calling out T-Mobile US’ plans as nothing more than a crazy move done in a desperate attempt to maintain customer growth regardless of the consequences. That feeling was perhaps best expressed by Sprint CFO Tarek Robbiati who told an investor conference this week T-Mobile US was in for a “hangover.”
Sure, a rival talking smack is probably not much of a surprise, and in fact is a move Legere has sort of made his own. But, even some from the analyst community have expressed concern.
“We do have concerns as to what such usage could do to [T-Mobile US’] longer-term network capacity,” said Wells Fargo Securities senior analyst Jennifer Fritzsche, in a research note. “We hate to say it, but we have seen versions of this trend before. In our view, if customer usage soars, the benefits in terms of customer adds and lower churn could be offset if the network does not live up to expectations.”
As I said, this is my favorite “Un-carrier” move from T-Mobile US because I think it has the greatest chance to go sideways real quick. Someone is going to handle this situation all wrong, and in the end that always makes for some great entertainment.
Thanks for checking out this week’s Worst of the Week column. Here is a quick, but satisfying extra:
–Speaking of crazy awesome news, word came out this week that a well-connected businessman is looking to throw billions of dollars at the U.S. mobile market in order to launch a new carrier and stir up some real competition.
According to reports, Chamath Palihapitiya said he was looking to raise between $4 billion and $10 billion to purchase enough spectrum during the Federal Communications Commission’s upcoming 600 MHz incentive auction proceedings to launch a nationwide carrier. No word on where Palihapitiya plans to get the other tens of billions of dollars needed to actually build out a network, or if the plan is to partner with an already established player where he will get the funds to market the service as a true rival.
I am of course in no position to tell an obviously wealthy person what to do with some of their wealth – but mostly with other people’s wealth – and in fact hope Palihapitiya moves forward with this crazy idea just because I love covering crazy ideas.
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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