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T-Mobile has been ruffling more than a few feathers in the U.S. wireless carrier industry with its promises to pay off customers’ termination fees should they leave another U.S. carrier to become a T-Mobile customer, the company’s covering of international roaming fees, among a host of other changes to its pricing structure and business plans in attempts to lure in users and pull it out of the number four slot in the U.S. market. But can T-Mobile actually unseat a giant like AT&T? After spending millions to cover unheard-of costs for new customers, and other benefits for existing ones — not to mention a hefty number of Super Bowl ads — will the company have gotten any closer to dethroning the top two wireless companies in the U.S.? The road is paved with challenges.
One challenge being AT&T’s and Verizon’s package offerings including cell phones, landlines, internet, and TV services. Verizon revealed in May 2013 that it had surpassed 5 million customers with its FiOS package. AT&T’s fourth quarter 2013 report noted that it has subscribed 5.5 million U-verse TV customers, and 10.4 million internet customers. With numbers like these, and with packages that provide a bundled service, customers are going to be less likely to simply switch cell plans — disrupting their tidy cell/internet/TV packages — despite the enticing promise that T-Mobile is the “Uncarrier”.
Another challenge is T-Mobile’s lack of similar capacity in terms of spectrum, although every carrier has room to grow in this sector. Bloomberg has called T-Mobile’s bold strategies “hobbled” by its lack of capacity. But the U.S. government is planning to dole out more spectrum over the next few years, and more spectrum could ameliorate the problem of users clamoring for more coverage of more high-speed connections on their mobile devices.
Perhaps — as the next few years include these new allotments of spectrum — T-Mobile’s coverage will improve. Perhaps it will see a significant number of transfer customers (it did boast a 1 million newcomers in mid-2013). Or perhaps Sprint — under the Softbank umbrella — will make a bid T-Mobile can’t refuse, and the two will collectively take on AT&T and Verizon. But so long as it trails in wireless capacity, and as long as its competitors have bundled services that include all of their communications and entertainment needs, T-Mobile will continue to face roadblocks to market dominance.
