T-Mobile's Latest Un-carrier Customer Care Announcement Shows the Existing Challenges in Delivering Market Innovation

In 2013, T-Mobile launched its strategy, nicknamed “Un-carrier,” with the goal of delivering innovation and disruption in the U.S. mobile market. Since then, T-Mobile has unveiled various Un-carrier initiatives based on a mix of marketing, innovative strategies, and network investment addressing some of the historical pain points of the U.S. mobile market. Examples of Un-carrier initiatives include the elimination of data caps, resulting in the company offering unlimited data consumption and free Netflix. The Un-carrier strategy has helped T-Mobile grow its service revenue from US$19.1 billion in 2013 to US$30.2 billion in 2017, with mobile customers increasing from 46.7 million in 2013 to 72.6 million in 2017.

In its recent Un-carrier announcement, T-Mobile launched “a team of experts” that are aiming to solve the issue of customer service by betting on people and not on chatbots to deliver excellent customer support. This move is in stark contrast with initiatives from companies from all sides of the technology market that more and more often rely on technology to enhance their customer support experience. T-Mobile is a disruptor in a mobile market where disruption is platooning, and its need to differentiate at all costs casts doubts on what is the future of the consumer market and what are Mobile Service Providers’ (MSPs) next source of revenue growth.

T-Mobile’s role as sector disruptor places the MSP in a continuous race to deliver market innovation and keep up its role; this is a high reward, high risks situation because failing to deliver innovation and disruption can significantly backfire in terms of market perception. The consumer market is becoming increasingly saturated in terms of market dynamics, potential, and innovation; consequently, delivering real disruption as has been done with unlimited plans, for instance, is becoming extremely rare. While competing MSPs may to a certain extent align with T-Mobile marketing and increase the use of local workforce for customer service, this time around T-Mobile Un-carrier initiative will not likely affect customer perception as much as its previous initiatives (e.g. unlimited packages) did. This is because the benchmark in customer service is not provided by competing MSPs, but by webscale and tech giants. Consequently, T-Mobile should not look to merely compare itself with its peers (e.g. AT&T and Verizon), but should aim to compare itself with webscale giants.

T-Mobile bets on people over technology in what is a risky move. MSPs have traditionally had poor customer support, which was not the result of the misuse of technology within the sector, but rather a result of companies’ lacking care regarding this part of their business (likely derived from the experience of many MSPs as monopolies).

Besides wanting to disrupt the mobile industry, creating a team of experts and, therefore, investing in local jobs may have a certain wider political appeal in the obvious form of supporting local economies and the job market. This point fits directly into T-Mobile’s strategy to gain approval of the announced merger with Sprint, which could partially explain T-Mobile’s stance.

T-Mobile understood the legacy pain point of customer care, but failed to address it with a long-term winning solution. MSPs must improve their customer service to stay on par with Over-the-Top (OTT) and webscale giants; a people-only customer service will struggle to compete with a hybrid tech and people approach. Leveraging the right technology with the right human expertise is the path forward, rather than boycotting technological developments. In fact, the leading companies in terms of customer service are those that can combine both technological and human expertise to deliver a seamless customer journey.

AI and chatbots are becoming increasingly popular, not only among MSPs, but among all tech companies and this is because they generate savings, but also because, if used wisely, they can effectively and quickly help customers with their everyday problems, while driving customer’s engagement. AI and chatbots should not be overlooked, but should be an integral part of a MSP’s customer support strategy. Orange’s Djingo, Vodafone’s Tobi, NTT DOCOMO’s Cotcha, and Telenor’s Emma are only a few of the many examples of MSPs turning to AI and chatbot technology to enhance their customer service.

T-Mobile’s initiative will struggle to bring market disruption, and this shows not only how difficult it is to innovate in the consumer market but also how MSPs needs to develop UnTelco strategies to pursue revenue growth. MSPs need UnTelco initiatives to move beyond a legacy telco business and are looking for opportunities in end-vertical markets, while developing offerings beyond the connectivity-only domain. The announcement shows the level of competition and saturation of the consumer market where MSPs are pushed to stretch the limit of their marketing and innovation capabilities to continuously gain an edge in a still market. In this case, T-Mobile identified a pain point (customer support), but developed a solution that while addressing the pain point may not revolutionize the market as done for instance by the company’s unlimited plans. Disruption in the consumer market is platooning and this creates an urgency for MSPs to turn to UnTelco for creating new revenue in vertical markets.

T-Mobile’s initiative also reveals how customer care is still a pain point for MSPs. MSPs must learn from the challenges that they face in the consumer market where exceptional customer support and experience are becoming increasingly important. This lesson must be learned and absorbed by MSPs, while they approach new end-vertical markets. Without that, UnTelco expansion in the vertical market will not be successful.

Un-carrier has been a source of growth for T-Mobile, but this strategy is showing some weaknesses. On the back of T-Mobile’s acquisition of Layer3TV, the company is likely preparing a bolder Un-carrier move to disrupt the pay TV landscape, however, the long-term future success of an Un-carrier strategy in the consumer market is becoming more and more difficult. There are emerging opportunities for T-Mobile (and for other MSPs) in both the consumer and the enterprise markets, and these include the smart home, consumer IoT, smart cities etc. T-Mobile must identify the most relevant areas of opportunity and disrupt them with a strategy that is centered on true innovation. The company needs to ensure its strategy and innovative efforts will continue to address new market pain points while being part of a long term strategic plan and not dictated by the short-term need of continuously bringing new solutions to the market. By delivering its Un-carrier strategy within this framework T-Mobile will continue being a force of change and growth in a difficult and challenging telco market.