Is T-Mobile leading the telco comeback?

Written by on February 18, 2016 in Opinion with 0 Comments

Debt, Finance, Bill.It almost seems as if we are at a cross roads. While January was the first month not to sport one IPO (the first month since 2011), telecoms results have been pretty robust. T-Mobile stands out. Profits tripled and they added over two million new customers in the last quarter. Orange also beat their own expectations, which drove telecoms prices higher.

All of this is encouraging news for telecoms companies, but certainly not something to make them take a holiday. T-Mobile, according to one analyst was the ‘only one not to disappoint on ARPU.’

It could be, though, that telecoms companies are dragging their heads out of the sand and, led by T-Mobile CEO John Legere, ‘fighting back.’ The zany, middle-aged, T-shirt wearing CEO seems to have judged the mood and climbed on board. The fact that Legere is actually not that zany and probably goes home at night and dons a pin-stripe to wind down, is not relevant. He knows his customers want ‘stuff’ and they want it cheap. His Binge On campaign, which is irritating the Regulator no end, is a huge success. Not only are customers flocking (in their millions) to T-Mobile, mainly from AT&T, but content providers are flocking too.

If proof were needed that customers want stuff, and access to stuff, cheap (or better, free) look at what happened when digital telco Telstra apologised for the recent (someone pulled the plug) outage by offering customers a free 24 hours of mobile data. One customer downloaded 421 gigabytes of data, and the total traffic was the equivalent of 5.1 million episodes of Game of Thrones.

Meanwhile, to add to the lack of investment for tech stocks, even large tech companies are getting into muddy waters. Regulators are clamping down on privacy issues. Apple and others are squaring up against the Feds in possibly the most crucial test case of the moment. Apple says no to unlocking the iPhone of the San Bernardino killer, the Feds say they need ‘reasonable technical assistance’ in order to track down and root out terrorism.

Yet, these privacy issues, these security issues have been in telcos’ blood for a long time. They have ‘ethics committees,’ they have Regulatory departments, they even have (less cleverly) innovation committees.

Sure, regulation is horribly out of date and in need of an ‘out of the box’ overhaul (we quite like the GSMA idea that the service delivered should be regulated, not the entity that delivers it). But the telcos know all about regulation, while the digital service providers are just beginning to be affected by it.

It is by no means a good thing that IPOs have dried up, or that ICT spending is predicted to drop this year. It is a good thing that telcos are finally being brave and innovative, behaving (almost) like software companies. This will drive the content partnerships that will make sense to all parties.

In all of this, one thing is for sure. We live in interesting times.

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Alex Leslie

About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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