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Industry Voices — Greenblatt: T-Mobile Sprint Merger Bodes Well for Both Customer Bases

September 23, 2019

There has been no shortage of speculation on the long-term implications of the merger between T-Mobile and Sprint that received recently formal support from the Federal Communications Commission’s chairman and conditional approval from the Department of Justice. It has not been an easy conclusion by which to come. Citing antitrust concerns, critics that include federal legislators and multiple states’ attorneys general argue that the merger to create a massive operator could be bad for both consumers and for competition in the mobile market.

 

However, a closer review and analysis reveals that the market may have every reason to believe the opposite. In fact, considering how these service providers operate across the total ownership experience and noting that the customer base for each remains focused on the cost/value equation, net gains for both subscriber bases are the most likely outcome.

This, of course, comes with the caveat that the leadership teams of both organizations remain focused on building on the strengths that each company possess and are candid about the opportunities for improvement for their combined 146 million customers.

 

A Rising Tide...Not a Zero-Sum Game of Customer Engagement

 

When it comes to overall customer experience, Sprint has consistently posted relatively poor results in surveys of mobile service subscribers. Conversely, T-Mobile has been one of the best performers in securing the vocal approval of their customers. As a result of being “customer obsessed” in the ongoing improvement of their services, the carrier has posted constantly improving customer satisfaction scores. In fact, T-Mobile outperforms other wireless carriers in both customer care problem resolution and the overall purchase experience. Moreover, all four of the major carriers have made impressive gains in network performance to serve the digital needs of the market, yet T-Mobile has been most successful in combining that technical progress with industry-leading customer service improvement.

 

Such positive performance and trends are the direct result of the strategic decision T-Mobile made in 2012 to establish competitive differentiation through outstanding customer engagement. As a result of this dedication, T-Mobile has boosted the number of customer interactions resolved through self-help channels, enabling the company to reduce the number of in-bound calls to its customer service representatives. The company then invested in minimizing (and in some cases eliminating) its interactive voice response (IVR), the system that interacts with callers, gathers information, and routes calls to the appropriate recipients. At the same time, the company enhanced operator training and improved the regionalization of its expert teams to elevate the quality of service for those customers who do end up reaching out to call centers.

 

Far from resulting in a “race to the middle” of the customer experience pack, the ongoing achievements in its customer service will likely carry over to a combined operator.

 

Applying Scale to Cost-Conscious Subscribers

 

Another factor that bodes well for consumers in the wake of the merger is that the customers of T-Mobile and Sprint share a similar profile in terms of preferences and desires. Subscribers of the merging service providers tend to be more cost conscious and tend to gravitate toward those carriers because of their lower prices and affordable service plans. In comparison, AT&T and Verizon customers mainly choose their carrier for network coverage, quality, and reliability. It is therefore reasonable to expect the value of the customer service culture in place at T-Mobile to resonate with Sprint subscribers.

 

The cherry on top for a T-Mobile/Sprint merger -- from an improved customer satisfaction perspective -- revolves around the future of the mobile service provider infrastructure. With 5G network coverage now being actively advertised by providers, and first-generation devices appearing on the market, the race is now “on” to see who can establish a beach-head in a post 4G/Long-Term Evolution (LTE) market.

 

Currently, high frequencies offer high data rate capacity over short range but don’t penetrate buildings well. And lower frequencies carry less data but cover greater distances and do a better job of penetrating walls and other obstacles. The key to delivering effective, ubiquitous services in the 5G era revolves around strategically using designated and standardized spectrum utilization in the high- medium- and low-frequency bands across all areas covered by a network provider. As separate companies, T-Mobile and Sprint were not optimally positioned from a network infrastructure perspective. But together, they can meet this challenge head on.

 

Verizon and AT&T are solidly positioned to (eventually) have the spectrum necessary to provide seamless 5G service. While less certain for separate T-Mobile and Sprint offerings, as one entity they will be able to mix, match, and integrate network resources to deliver the 5G services that will be “table-stakes” moving forward. Thus, only in a post-merger world will the overall market have a viable option to AT&T and Verizon for their 5G needs.

Win/Win

 

Wireless customers differ in what is most important to them, just as major carriers have a defining strength made obvious by both their marketing and their performance. Be it the most reliable network, best customer care, or the broadest set of services from one brand, the post-merger landscape will contain amazing and differentiated choices.

 

Whether or not the merger resonates with subscribers will be a matter of effective execution. However, the conditions for success are in place. Customers of this new network should have a lot to smile about if T-Mobile’s customer-centric culture combines with the converged network infrastructure of both network service providers.

 

Ian Greenblatt leads J.D. Power’s Technology, Media and Telecommunications Intelligence, including a new IoT sub-practice, and drives market strategy across the rapidly converging landscape, which encompasses the entire communication sector. You can reach him by email at ian.greenblatt@jdpa.com and follow him on Twitter at @GreenblattTMT.

 

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.

 

Source: https://www.fiercewireless.com/wireless/industry-voices-greenblatt-t-mobile-sprint-merger-bodes-well-for-both-customer-bases

 

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