John Legere, the ‘maverick’ CEO of T-Mobile, wanted to be a gym teacher. Then he discovered how much money he would make and studied business instead. Given that he has shaken the telecoms world up fairly considerably in the last few months and attracted considerable attention – notoriety even – by crashing AT&T developer parties, his biography reads like a proper corporate biography. Telecoms through and through. Looking a little closer, you can see he has had some help. In November 2012, he appointed Mike Sievert as CMO. Refreshingly, Sievert has a career outside of telecoms, with positions at Procter and Gamble, Microsoft, Qualcomm, as well as a couple of telcos. Together they decided to disrupt the safe, bureaucracy driven game that was telecoms.
Their greatest gambit must be their ‘uncarrier’ strategy. And the more successful the strategy becomes, the more they dress like teenagers. Not for them the corporate photos, against faintly swirly backgrounds. Now, for them, motorbikes and gate crashing, base ball hats on backwards.
But they have dared to challenge the tried and tested strategy of locking customers into longer and longer contracts as if that is how we have always done it – and, er, live with it.
And it is working. T-Mobile has gained considerably on rival AT&T over the last quarter and continues to do so. Essentially they have taken a huge risk on customers’ behalf and let them out of contract prison. They are even paying them to do it.
There is little doubt that a shake up was needed. With competition (or at least uncertain partnerships) from OTT players getting ever stronger, uncertainty about the feasibility (for telcos) of M2M offerings and the rise of fraud, the industry needs to become more dynamic, more focused on the customer.
But by abolishing contracts, a move which is being followed and copied by more and more operators, the stakes are high. Now, the inertia that tends to stick customers to carriers is disappearing. Now, operators must finally think about that customer experience. Now they must truly partner with OTT players to offer compelling services and products in the right way, at the right time and in the right place. Let us hope that they understand that to do this takes a lot of real-time capability, intelligence – and common sense.
If they do not, then the jury is out as to whether this is a sustainable move that will usher in greater and greater clarity around data pricing. If not, customers who have Jumped to T-Mobile might just keep on jumping.