The following is an excerpt from Business Insider Intelligence’s forthcoming 2018 Digital Telecom Consumer Survey. To receive access to the full report as soon as it’s released, please contact Jeff Jordan at firstname.lastname@example.org.
T-Mobile is putting more space between itself and the competition when it comes to value for cost, according to Business Insider Intelligence’s 2018 Digital Telecom Consumer survey.
T-Mobile ranked highest among the Big Four telecoms for the second consecutive year in terms of value for cost, with 81% of its wireless subscribers rating the carrier’s value for cost as “good” or “outstanding,” compared with 68% last year.
That’s well above its competitors this year, which all saw their value for cost change by just a few percentage points. For example, T-Mobile’s closest competitor on this front, Sprint, increased its value for cost by just five percentage points, from 47% in 2017 to 52%. Meanwhile, T-Mobile’s percentage-point lead over Sprint increased by 8, from 21 to 29.
T-Mobile’s streamlined plans and additional perks explain its value to subscribers. The carrier’s two plans — T-Mobile One and the new T-Mobile Essentials plan — are both very straightforward.
While T-Mobile One isn’t the company’s cheapest plan, it’s packed with features and content that make it feel like a great deal. For example, T-Mobile reduces download speeds after customers use a certain amount of data, but thanks to the Binge On program, streaming video and audio don’t count, and unused data can be rolled over from month to month.
Meanwhile, the T-Mobile Essentials plan strips away certain features like international data and free Netflix for consumers who want an even cheaper, simpler option.
T-Mobile’s Un-Carrier initiative seeks to lure consumers with a spate of consumer-friendly policies, like zero-rated video streaming and free international plans. Just last month, the company introduced free Pandora Plus subscriptions, concert benefits though a partnership with Live Nation, and a dedicated team of experts for customer care.
T-Mobile’s next Un-Carrier move is expected to be the launch of a new online TV service this year, fueled by its December acquisition of Layer3 TV. While AT&T has been making moves in this regard over the last year with its acquisition of Time Warner and its newly launched AT&T Watch skinny streaming bundle, Verizon pales in comparison, as it still is seeking content partnerships after pulling the plug on its Go90 free digital video streaming app in June.
T-Mobile subscribers are also satisfied and loyal. T-Mobile outpaces the rest of the Big Four US telecoms on customer satisfaction. Eighty-three percent of T-Mobile customers surveyed by Business Insider Intelligence said they were at least somewhat satisfied. Verizon came in next with 71%, followed by AT&T and Sprint with 61% and 56%, respectively.
The carrier’s customers are the most loyal — 16% say they’d remain with the company no matter what. Meanwhile, just 12% of Verizon’s subscribers said they wouldn’t switch to another carrier for anything, while 11% of AT&T’s subscribers and 4% of Sprint’s subscribers said the same.
T-Mobile’s pending merger with Sprint should catapult it to even greater success. T-Mobile and Sprint reached an agreement in late April to merge under a new, combined entity that would retain the name T-Mobile. If the US wireless industry’s underdogs among the Big Four are approved to team up, the new company’s increased size, value, and combined network holdings and technologies would be a major benefit, introducing an even bigger threat to Verizon and AT&T.
The new company’s subscriber base would be comparable to Verizon’s and AT&T’s. Verizon and AT&T are far and away the market leaders in terms of customer volume — Verizon’s customer base doubles T-Mobile’s and is just shy of triple the size of Sprint’s, for example. However, the combined company would have a subscriber base of 127 million customers, inching closer to Verizon’s 150 million and AT&T’s 141 million.
It would also be able to offer subscribers more free content, which is key to capturing customers from Verizon and AT&T. As mentioned, T-Mobile offers popular perks like free Netflix and Pandora subscriptions to its customers, while Sprint offers free content like Hulu and TIDAL subscriptions. The combined entity could pool this content together to give its subscribers a slew of free perks, making its overall offerings more competitive. For context, a third of both Verizon and AT&T subscribers said free content and streaming that doesn’t count toward their data allowance would convince them to switch mobile service providers.
The merged firm would be able to scale its IoT network, and catch up to Verizon and AT&T. US carriers are expanding the services they offer in the IoT to ramp up their subscriber bases in the face of a shrinking pool of new mobile customers.
Verizon and AT&T have a head start over T-Mobile and Sprint in rolling out IoT-specific networks — both carriers built out LTE Cat-M1 networks in the US last year, which would be useful for a set of IoT use cases — but merging could help the combined carrier access the resources needed to quickly scale a widespread IoT-specific network. This is especially important, as 30% of respondents are interested in paying for a plan for connected devices.
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