What on earth is T-Mobile thinking?

I was recently challenged, in a friendly way, about how I came across as being very “pro T-Mobile”, particularly over the handling of their relationship with Samsung. Here’s what I responded (give or take a few tweaks):

It’s not a case of being “pro T-Mobile”. It’s simply a case of trying to understand the business dynamic, and if we are going to consume energy in discussing “fault” and “blame” at least understand where the various layers of responsibility sit.

I have never been, nor do I plan to be, an employee of TM. I have been a customer, both personal and corporate, for many years. Just as I have been a corporate customer of other carriers, both here in the US and in other parts of the world. Over those years, I hope I have gained some insights into the business that are not always apparent to the regular consumer, and what I share here may only be opinion, but I hope it is educated opinion.

In a nutshell, I don’t think TM USA is in this for the long haul in the same way that Verizon and AT&T are. I think they have certain commercial imperatives that they must follow in order to make real advances in market share over the next year or so, or they will disappear ignominiously.

While there is a risk that they will lose customers because of the Samsung Vibrant issue, it pales into insignificance compared with the number of new customers that they need to win in order to significantly overhaul Sprint and position themselves for a merger of “partners” when the time is right. If they fail, they will simply be passed by or swallowed up with little or no power in the new order.

Rightly or wrongly, their business strategy seems to have been set aggressively to exploit the temporary parity that they have achieved through their HSPA+ network. In time though, that will fall behind the LTE and Wimax-Plus networks of the other carriers. However, TM doesn’t much care because, by then, they will have either merged with (probably) Sprint or will have failed conclusively. *

In order to make their progress with HSPA+ count, they MUST have compatible devices out there to exploit the higher speeds. That’s why they have to press forward with these new devices, even though it looks bad in relation to the Vibrant.

They didn’t plan for the Vibrant to have problems, and doubtless they are as bemused as we are that Samsung seem incapable of fixing the problems without introducing new ones. Ultimately, however, they can’t let this issue with the Vibrant derail their strategy, which calls for a rapidly growing customer base through low cost access to 4G.
The need to be commercially competitive in relation to their improving network offering is also what will drive their continued publication of bloatware (T-Mobile.TV etc), which is designed to create alternate revenue streams that will subsidize their investment in the network upgrade, since they have said they do not plan to introduce premium rates for 4G. So don’t look to see them offering a wide selection of bare-bones Android devices, since that would directly undermine these intiatives.

I still don’t doubt that we will see Android 2.2 on the Vibrant, despite all the (often ridiculous) conspiracy theories that are bandied around. When? I have no idea, though I think as soon as all the carriers are ready to go, every Galaxy S user will get the update in a hurry, because that is when the real commercial competition begins.

Despite their claims to have superior customer service, TM isn’t your friend, and it isn’t a charitable trust. It’s a company that has to do better at winning new customers or it will disappear without trace.

Finding a win-win strategy between the company and customer isn’t easy, but as long as they pursue a course that wins substantially more new customers than the number of old customers that they lose, they will be succeeding in their objectives.

* I’m aware that an advanced version of HSPA+ is scheduled to arrive in 2013, which will take potential download speeds up to 650mbps. I just don’t think that TM will have time to deploy it before the writing is on the wall, and they have to merge or submerge.

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