T-Mobile’s Business Push, Technology Advantages, and 5G Slicing with Daryl Schoolar

Full Transcript

0m10s Speaker 0

Hello, and welcome to the two hundred and third episode of the week with Roger, conversation between analysts about all things telecom, media, and technology from Recon Analytics. I'm Don Kellogg, and with me as always is Roger Antner. How are doing, Roger?

0m23s Speaker 1

I am good. How are you?

0m24s Speaker 0

I'm good. So, Roger, uh, you're in the process of writing an article about Starlink. Can you tell us a little bit about it?

0m31s Speaker 1

Well, as the audience knows and probably is sick and tired of it, we run the fastest, largest, most agile customer insights. So 200,000 plus people answer our survey every year, both in broadband and in mobile and you know, more than 50,000 businesses. And Starlink is finally big enough that we have really robust sample. And that means you know, the last year or so we have around 1,300 Starlink respondents. And now we can finally do things with it.

1m11s Speaker 1

And we have insights that nobody else has in this magnitude, right? Two of the things we do is we ask every one of our home internet customers if they experienced issues in the last ninety days, and to tell us what issues they are. And these are user reported issues, which is important, which is different to how an operator measures it. An operator measures it and says, you know, this and that went down and therefore I had an outage. The consumer looks at it says like this thing doesn't work, and or this happens, therefore I'm not an expert but here's what it is, right?

2m1s Speaker 1

And so when we look at like Starling or at the issues, the most annoying issue is the internet connection went down. The best here are the major fiber providers. Our respondents tell us that 24% think that their fiber connection went down in the last ninety days. For example, I have Verizon Fires since like it came out like seventeen years or something like that, And I know I had three times an outage, right? Now and then it goes down, but it's usually the router or something like that.

2m40s Speaker 1

But that puts things in perspective. The user or the customer reported numbers are higher than what the engineering department will tell you. The second lowest number for when the internet connection went down were actually the large fixed wireless providers with 25%. Followed, lo and behold, Starlink, 30%. Wow.

3m4s Speaker 1

And then DSL, 33%, and cable, 39%.

3m8s Speaker 0

Ouch.

3m9s Speaker 1

Well, yeah, but let's focus on Starlink. Beating on cable is a little bit of like beating a dead horse. We all know it, right? But Starlink, for the tolerance, and they have now over 6,000 satellites up there. In the beginning, you were in a desert, and there was a tree on the horizon.

3m29s Speaker 1

The thing didn't work because oh I can't connect to a satellite. Those days are gone. This is actually really, really good, right? The other thing is like we asked them was the internet slower than usual? And Starlink has like an industry leading figure with only 24%.

3m50s Speaker 1

Fiber, people think fiber has like 31, FWA 27, cable 34, and DSL 32. How your DSL can be slower than it already is, I don't know, right? You know? And then the other thing is Starlink has like this really exotic looking router. This thing is like, according to our respondents, really rock solid.

4m19s Speaker 1

Only 20% report that they had to reset their router, and only 19% report that their device is disconnected from the network. And that's again, you know, industry leading.

4m33s Speaker 0

Right. Although I would say, you know, given that the Starlink install kit is $500, it better be a pretty damn good router.

4m40s Speaker 1

Yeah, it better be. Well you pay you know what you get for. What you get, right? I think the router that AT and T has given you isn't that much cheaper. That's a kick ass router, right?

4m55s Speaker 1

My Verizon router I bought for it's the official one I bought on Amazon for like what, 200? It's not the greatest router, let's say this way. But like when we look at resetting routers, you know, it's between 2733%. That's like the industry values. And for disconnect, it's like 25 to 28%.

5m22s Speaker 1

As always, fibre and FWA is the low end and DSL comes in in the middle. We also ask CNPS number, our version of Net Promoter Scores. And we do this around 16 dimensions. And you know, the new hierarchy is really FWA, satellite, or Starlink fiber cable DSL. I was really, really blown away with it.

5m53s Speaker 1

By the way, 85% of our respondents for Starling are from rural zip codes, which is exactly what you expect. When I look at the scores, they are really, really good with two exceptions. That is billing support over the phone and technical support over the phone. And the in store experience, and for in store experience that's our friends from Target, Walmart, Best Buy, the number is atrocious, right? It's like near the bottom of what we measure.

6m32s Speaker 1

You know, Elon Musk should really reach out to his distribution partner and give them a pep talk. Because that's really a massive weakness. We've seen this weakness before that CNPS number for in store experience is very similar to the scores that we see for prepaid providers who are selling through these same outlets. It's not Starlink, it's their partners. And they're equally dissatisfying than that.

7m6s Speaker 1

But it's like really fascinating. One of the things I'm looking in in more detail is why are the numbers that good, right? We know that with FWA, the numbers are that good because you know, you take it home, it works, you're happy, we find you, you answer us, I'm happy. Or within three days you return this thing and we can't find the unhappy people. Right?

7m35s Speaker 1

And so with Starlink, is this because the service is objectively so great, or have the beatings from the other services, you know, subsided?

7m48s Speaker 0

Yeah. Mean I think it's a little bit of the latter, right? I've had some firsthand experience with Starlink. My folks live out not totally in the middle of nowhere, but up on top of a hill. There's no cable access.

7m59s Speaker 0

For years, they had a pretty substandard wisp that would get, you know, maybe one or two megabits down, and it was terrible. Right? Like, you know, it's like going to Soviet Russia when I went to go visit them because the Internet, nothing worked. Right? They got Starlink.

8m13s Speaker 0

For all intents and purposes, you wouldn't know that you're bouncing off a satellite unless you're going to play, you know, some sort of first person shooter game or something like that. It's perfectly fine for streaming. It works great for the web. I think for most folks use cases, it's gonna address their needs. One thing I would say is who you had first or prior, and I think this is true for FWA, for folks coming off of, you know, abusive DSL or cable relationships, or for Starlink for that matter coming off probably DSL, if not nothing, you know, it compares really favorably to what a lot of folks had access to.

8m47s Speaker 0

And as we think about how do we cover the more rural parts of the country where, you know, it's almost like a hierarchy, right, where where it makes sense to build out fiber, fiber is probably the best option, where where that's cost prohibitive then, you know, maybe it's fixed wireless and everywhere else, you know, satellite seems to be an option.

9m4s Speaker 1

Yeah. And it's really encouraging that consumers are reporting back to us that they're really happy. It's really a lot faster, a lot more responsive.

9m15s Speaker 0

Well, and and there's a big difference between kind of the old flavor of satellite with like the HughesNet and ViaSat Yeah. And the Starlink data we're seeing coming down too.

9m24s Speaker 1

And by the way, Starlink also has a great website. There's a market difference between the FWA and Starling's website and everything else, right? Fiverr still has a positive FWA website, know, and the others are solidly negative. And by the way, gaming, our gaming score is a plus 24 for Starlink. And that compares to Fibre guys between plus three and plus 10.

9m56s Speaker 1

And so I was surprised, maybe Starlink customers don't shoot people in the face over the internet going through a satellite, but you know, if they do, apparently it works. Maybe somebody can reach out to us who has Starlink and who does first person shooters. But the numbers are like wow, this looks like a provider of very rural choice. By the way, people also give Starlink, even though it's $100 a very respectable value for price score, which is, you know, only second to FWA, which comes in at like a third of the price. And the customer self help is also highly rated.

10m43s Speaker 1

I'm like unexpectedly, pleasantly surprised.

10m47s Speaker 0

Yeah. I had a similar firsthand reaction, right, in terms of I'm not the world's biggest Elon fanboy, but they've designed a a really competent, well run service in the sense that, you know, if you didn't know it was satellite, you couldn't tell.

11m2s Speaker 1

Yeah. And so the other thing that's really interesting is Comcast Business has signed an agreement with Starlink to be able to offer this nationwide, including urban areas, to businesses. And this is basically Comcast's answer to FWA. And based on that, this is a very competent threat, because when you look at Comcast or the cable companies in SMB or more small, they kind of tapped out. They're at like 50% penetration, which is like really, really good, right?

11m43s Speaker 1

But there's only so much more to go, right? You're starting to wring water out of a stone. And the Starlink arrangement really opens up the location count. It doesn't help them yet with the capabilities, but Comcast bought Masergy, which is I thought a very good decision, and they are implementing more and more of these higher end solutions, but that's a pretty heavy lift selling to enterprise and medium businesses compared to small. But this is like a major step for them, and it didn't get enough attention in the press.

12m21s Speaker 1

And I was like, holy cow. They partnered with Starlink. I'm seeing these numbers. Winter is coming. Bundle up.

12m31s Speaker 0

Well, I mean, I think it's a good answer from a fallback slash reliability perspective as well. Right? So I mean, a lot of a lot of small business owners are really focused on continuity of service.

12m43s Speaker 1

Yeah. And and it's reliable. Right? It has the second best numbers on the internet went down. It's a stable connection, and small businesses don't use, hopefully don't use video.

12m56s Speaker 1

And so you have like a 100 gig use, which is what Starlink is they're doing a really good job with traffic management, and so they have a stable connection. If you're not gonna watch you know 20 fourseven streaming video, this is a really good solution, and it's a really, really good fit. You know, hats off to Starlink, hats off to Comcast Cable on the business side. Good job.

13m22s Speaker 0

Cool. Alright. Well, we'll we'll talk to you next week. Thanks, Roger.

13m26s Speaker 1

Talk to you next week. Bye.