T-Mobile is probably on the right track in the US. The question is why it took them and CEO John Legere so many years to copy what other operators have done successfully around the world.
Much of what is said, written, and broadcast about the American mobile market demonstrates that many Americans have difficulty seeing beyond the country’s borders. The notion of “not invented here” pervades many companies. For some, it’s more fun to learn to bark than to buy a dog.
T-Mobile’s charismatic CEO John Legere is refreshing for some, but for those of us who have followed the mobile market for 20 years, he is nothing new. His approach is similar to a number of CEO of mobile operators and MVNOs around the world who have had success leveraging the media and using a direct way of communicating to attract and retain customers.
Here are just a few of the mobile operator CEOs who have used this strategy successfully: in Denmark, Telmore’s Frank Rasumssen, CBB’s Teddy Søgaard Pedersen, and Onfone’s Morten Strunge; in Belgium, Stan Miller of Base; Xavier Niel of Free in France; Jorgen Bang Jensen of P4 in Poland; Rolf Hansen of Simyo in Germany; Idar Vollvik of Chess in Norway; and Masayoshi Son of Softbank in Japan.
John Legere is one of many CEOs in the mobile world who has used the media to exhibit competitors as dinosaurs. There is nothing new to market oneself as the consumer friendly operator which, unlike competitors, is working to ensure customers value for money. If you want to call him a copy, he’s one of those copies that looks like the original.
T-Mobile took a long time to implement its current strategy. It is almost four years since AT&T tried to buy T-Mobile for US$39 billion. In March 2011 Strand Consult published this research note stating that the reason that T-Mobile was sold was that it was a classic example of mismanagement. It’s mind-boggling to think that T-Mobile did not implement the strategy that was used successful against its parent Deutsche Telekom in Germany, Netherlands, Austria, and Poland. Instead it chose to try to learn how to bark rather than to buy a dog. T-Mobile is not first mobile operator where ego weighs heavier than the interests of shareholders.
Ultimately in August 2011 the antitrust authorities blocked AT&T’s attempt to acquire T-Mobile. At that time Strand Consult published a research note suggesting that T-Mobile could implement a “Plan B”, which was based upon Strand Consult’s reports including How to Succeed in the Second-Generation MVNO Market. After long last, T-Mobile with John Legere at the helm, is implementing the plan that Strand Consult said it should take four years ago.
Compared to what it has seen in other countries, Strand Consult gets a feeling of déjà-vu when it looks at the American mobile market. Verizon and AT&T keep a low profile, and Sprint doesn’t know which leg to stand on. It is clear that John Legere has beaten Masayoshi Son to the punch: T-Mobile is implementing the strategy for which Softbank is known for in Japan.
The question is how Verizon and AT&T will react and whether they will do as a number of incumbents around the world have done without success. In practice, they communicate that they have good network and focus on the sale of phones with high subsidies – something that many Americans buy but which has proven to be costly for shareholders.
The next two years in the US will be interesting. Those who whine about a duopoly don’t realize what’s going on. Legere abuses the duopoly myth for media impact just as he brags about T-Mobile’s success to create competition. T-Mobile’s turnaround is just one proof-point of the competition in the US market. There are many factors beyond the number of operators that create competition.
Over the years Strand Consult has conducted numerous strategic workshops for management and boards of mobile operators around the world. It has helped operators implement the Legere strategy as well as respond to it. To learn about Strand Consult’s strategic workshops for leaders in the mobile industry, contact Strand Consult.