Relishing the Role of the Underdog

AT&TMost don’t expect innovation from a phone company. AT&T, Verizon, Sprint are all names that carry the baggage of poor customer service, increasing “fees,” and undecipherable bills. On the rare occasions they do try to innovate, like AT&T with the iPhone, it’s the hanging on the afterglow of a hardware company like Apple. Why should they innovate? They have nice oligopoly and make hefty profits.

Every so often an underdog will show up and surprise you. T-Mobile is in 4th place in the U.S. wireless market today behind AT&T, Sprint, and Verizon. The T-Mobile network is not as advanced as the others, still operating on older GSM technology while the major players have upgraded to offer mobile broadband services targetted at business users. However, T-Mobile has quietly been listening to the market and making underdog moves that have the potential to shake up the industry.

myFavesFirst, they introduced a feature called “myFaves.” MyFaves is a software and service that allows you to define your favorite five people that you call the most, and load them on your phone. They introduced a very FrontRow-ish interface to see and scroll through the Faves. On the service side, the five people you define as your Favorites are free for you to call – an unlimited amount of times, even to landlines. What is great about this feature is that T-Mobile obviously spent some time listening to their customer base, because their own data shows that most people make 66% of their calls to the same five people in any given month. Think about that – a wireless carrier intentionally giving up revenue on two-thirds of your calls.

Another notable feature of myFaves is that it is well aimed at T-Mobile’s target market: youth. Assigning your “top 5” is a natural extension of what tweens, teens, and college students are doing today with social networking sites like MySpace and Facebook. Kids can reward their friends by putting them in “their 5” or demote people they are feuding with. In the future, when they are able to tie it together with GPS applications to see where their five are at any given time, it could also appeal to families.

The second and probably more impactful step that T-Mobile has recently taken is their new HotSpot@Home service. T-Mobile already operates one of the largest WiFi hotspot networks in the nation, having tied up Starbucks and other prominent locations. Now, for a small additional fee, you can turn your home into a T-Mobile HotSpot, and use your WiFi to supplement your wireless minutes on one of T-Mobiles dual WiFi/GSM phones. This means that you are not using up wireless minutes when you are at home.

This is a super important development that is also well aimed at T-Mobile’s younger market. Recent studies have shown that 25% of 18-24 year old’s and 29% of 25-29 year old’s have foregone the landline and rely solely on their mobile phone. I am one of these people, and it’s no fun to know that you are at home and have tons of available bandwidth in your Internet connection sitting untapped because you can’t use it with your wireless phone.

The established wireless companies will resist introducing a dual WiFi/wireless phone as long as possible because it threatens their established revenue channels. As the underdog in a saturated market, T-Mobile’s gain is their loss. I predict that T-Mobile will see a bump from this service once people start to catch on.

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1 Comment

  • Reply Roark Pollock August 16, 2007 at 8:42 pm

    Paul,

    Thanks for the information. The HotSpot@Home service is quite innovative for T-Mobile. I will reserve judgment on whether I think this will be a successful revenue generator for them, but I just checked and all the T-Mobile WiFi handsets are Temporarily out of Stock. So at least the WiFi phones are a hot seller.

    However, given T-Mobile’s previous product marketing successes, I imagine they understand the market demand very well.

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