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 fortieth episode of the week with Roger, conversation between analysts about things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Antner.

0m22s Speaker 1

How are doing, Roger? I'm great. How are you?

0m24s Speaker 0

I'm good. So Roger, in the midst of, you know, whatever this tariff stuff is, there's some new plans on the home Internet side from Xfinity. You wanna tell us about them?

0m34s Speaker 1

Well, life goes on and people have to do business. You know, when we look at Comcast, I think we're seeing changes happening. And I always say numbers and facts don't make decisions. People make decisions. And we're seeing that the new leadership that's coming in at Comcast is making different decisions than the old leadership team.

0m55s Speaker 1

We've identified various pain points that the cable providers have had. And, you know, you and I are big fans of straightforward pricing by the cable guys. Well, by everybody. Yes. But we've had our fingers in developing this behind the scenes in a big way.

1m14s Speaker 1

Anyway, cable companies have traditionally gone to market in a different way. We know that customers hate exploding prices. We know customers don't like data caps. We know that the router is a critical component of the Experience. Of the experience.

1m33s Speaker 1

And lag is a problem with gaming, and you wanna have some additional things around. And we've talked about it here, and I don't know if anybody from Comcast is listening. But they came out April 15 with a new price plan, which I'm like very impressed with. It has a five year price guarantee starting at $55 for 400 megabits per second. In my market, I'm in Boston, it's $55 for 400 megabits, dollars 70 for 600 megabits, 1,100 megabits is $85, and 1,300 megabits per second is a $105.

2m16s Speaker 1

We compared notes. And Don, what what would you have to pay for this?

2m21s Speaker 0

So I'm in the Bay Area. Right? So I'm in an Xfinity slash AT and T Fiber area. You're in a Verizon FiOS slash Xfinity area. Right?

2m30s Speaker 0

Yep. The introductory price for me is still the 400 for 55, but I have 600 for 60. So that's $10 less than what it was for you. And then 65 for 1.1 megabits, 85 for 2.1 megabits. Gigabits.

2m46s Speaker 0

Gigabits. Gigabits. I'm sorry. So pretty differential pricing there in terms of what you get for where.

2m53s Speaker 1

And different capabilities. So they have built out your market with high splits a lot more and earlier than they have done here in Suburban Boston. But nevertheless, it's five year guaranteed pricing. And to me, year guaranteed pricing is forever. Right?

3m11s Speaker 1

But what's very interesting is when you go to the web page, you can still get the exploding prices. So they're doing like a real live AB testing of what customers like more. But them doing fixed prices, straightforward pricing is very encouraging. Then it comes with unlimited data. They used to have 1.2 gigabits.

3m33s Speaker 0

Terabytes.

3m34s Speaker 1

Terabytes. Right? Terabytes. Sorry. You know, we get the metrics wrong.

3m39s Speaker 1

1.2 terabytes, which should be enough for most people. But when you even go once over, you have a bill shock, people get pissed. That's why we always said like unlimited data and it's not that much money, they make more. It's much more customer friendly to do the unlimited data. So that's a big point.

3m59s Speaker 1

They have invested significantly in a new router. And, you know, in true Apple fashion, it's the best router that they ever made before, which I would expect. Right? Why sell a worse router or worse phone than the one before?

4m15s Speaker 0

Well, probably wouldn't go to market with saying this is the second best router that you've ever

4m19s Speaker 1

Yes, created, last year's router or the one we built three years ago, that one's better, this one has shit, right? And they have wrapped it in no additional cost. Right? Yep. So you have really transparent pricing, which I think is great.

4m36s Speaker 1

They have also ultra low lag Internet. And we know that Comcast is at the forefront of that for cable. We've talked with some people there and they showed us stuff like when? A year ago? Remember?

4m48s Speaker 1

Two Yep. Years And was already impressed then. And now I'm even more impressed. And then they're wrapping in some cybersecurity protection and parental controls. And they're topping it off with a five year guarantee for an unlimited mobile line, no cost, one year.

5m6s Speaker 1

That is a very impressive offer. Right?

5m10s Speaker 0

Mhmm.

5m11s Speaker 1

It's more impressive in The Bay Area than Boston. But still, you know, now they just have to get more customers, better customer service. And it's amazing, you know, what a little bit of competition from fiber and FWA can do to an organization.

5m26s Speaker 0

Well, right. I mean, that's what that was gonna be my next point, right, which is that, first of all, congratulations to Comcast for coming out with a finally a good plan. Right? I think this is a consumer friendly plan that includes a lot of the things that we talked about. Yeah.

5m39s Speaker 0

We talk about typically in terms of no surprises on pricing, allowing full usage of the network without having to throttle people, things of that nature. Think router included all very good. This also doesn't happen in a vacuum. Right? And Exactly.

5m53s Speaker 0

FWA is balls to the wall. Fiber is getting built out all over the country as well. Starlink is an option for some people as we've mentioned as well. And so I think, you know, this is the market working in terms of competition driving prices down, which is probably not a lot of prices going down over the short term here, over the next six months. But I think it's positive.

6m12s Speaker 0

It's absolutely positive.

6m13s Speaker 1

It is very, very positive. Right? Now they just have to get good customer service. You know? I'm sure they will get to that at one point too.

6m21s Speaker 1

But I think the encouraging thing is, you know, as Martin Luther King said, the arch of history is wide, but it bends in the direction of justice. And I'm glad that here it bends into the direction of straightforward pricing and better equipment and doing the right thing for customers. We kind of seen this bend, this arch bending with, when was it, October, November, When Charter came out with their Life Unlimited thing where they had a guarantee with it, and they had slowly exploding prices over five years. And now this is not exploding prices after five years. And by the way, this is no contract.

7m5s Speaker 1

Oh, we forgot. This is no contract. Comcast used to have contracts. Right?

7m11s Speaker 0

Mhmm.

7m11s Speaker 1

So this is no contract, which is another innovation. At least it's innovation for Comcast. Yep. It's not innovation for the others. We've seen this in mobile.

7m21s Speaker 1

We're seeing this on the Home Internet side. When you have a great product and you're treating your customers well, you don't need a contract because they don't want to leave. Right?

7m31s Speaker 0

Right.

7m31s Speaker 1

And if you mistreat them, they're gonna leave. And the penalty and the contract will not hold them back.

7m37s Speaker 0

Yeah. I mean, I think the other thing that's interesting here, and you you've mentioned it a little bit, but, you know, I wanna underscore this, is the extent to which guarantees are becoming more common. Right? So there's the AT and T guarantee, the Spectrum guarantee, Comcast is presenting the price lock or the five year pricing as a guarantee. And Verizon is also talking about value guarantees and things of that nature.

7m59s Speaker 0

Yeah.

8m0s Speaker 1

Well but guarantee is is a little bit the admission that you had done something wrong. Right? Comcast in their press release said like, this offer addresses two pain points, a lack of transparency and not predictable pricing, which is as much of a mea culpa as you could realistically hope for, where they basically said, yes, yes, we hear you. Right?

8m24s Speaker 0

Mhmm. Mhmm.

8m25s Speaker 1

But it's still interesting that they are, you know, I always say like, look at what people do, not what they say. Actions are a lot more reliable than words. And they're doing still the beta test on their website. So that's kind of interesting too. Yep.

8m38s Speaker 1

But yeah, it's a move direction. I think the new leadership that we see at Comcast and at Charter, you know, with Chris Winfrey taking over, you could see under Brian Rutledge, 35 megabits upload speed is all you need. Right? Winfrey takes over, and it's like, okay, let's go symmetric. Right?

9m0s Speaker 1

The cable companies are looking much more at customer satisfaction figures like Net Promoter Score. And it doesn't matter how you slice and dice the data and how you add and subtract customer satisfaction scores, it is encouraging that their decisions are driven from the perspective of customer satisfaction. Because there's nothing wrong with having happy customers.

9m25s Speaker 0

As long as you're making money at the same time. Right?

9m27s Speaker 1

Here's the thing. Are you actually going to make money on unhappy customers? Instinctively, you know the answer.

9m36s Speaker 0

Well, right. But I mean, think that's the different that's why we've gave credit to fiber and and FWA earlier. Right? Because I think that was a business model that was available to the cable companies in a lot of circumstances. But one of the things that FWA has done is it democratized in some ways the access to the Internet such that you don't have to go through an MSO to get reasonably fast Internet connection.

9m56s Speaker 0

You can go with FWA. And it completely changes the calculus. Right? You can Yeah. You know, it's no longer worth it for the MSOs to do the exploding pricing.

10m5s Speaker 1

To be atrocious to their customers.

10m7s Speaker 0

Right. Because they can leave now.

10m9s Speaker 1

Right? Exactly. And and so, you know, they still have things to fix like everybody else, but guarantees are an implicit admission of guilt, right? We've been bad before. And I promise you, I won't be bad anymore.

10m21s Speaker 1

I only have to say that when I don't have to promise my wife that I'm not going to cheat because I'm not cheating, Right? And I don't I've never done it and I will never do it. And so, yeah. So here, they are finally doing it. So it makes me very happy.

10m36s Speaker 1

It raises the bar for everybody. And it should create a better product. What's also interesting is like how the speeds are getting faster, but it also highlights a little bit the continued, and in my opinion, continuing success is that with a lot of things, on one hand, where faster is better and you can't argue with that. Right? Mhmm.

11m1s Speaker 1

But when is it fast enough? And I think a lot of the FWA people are making a conscious and deliberate trade off between money and speed, where the admittedly slower speed that comes with FWA is worth it. And by the way, we see in our data, there's no trade off between when it comes to reliability. FWA is as reliable, if not more reliable.

11m30s Speaker 0

For the people that decide to keep it.

11m32s Speaker 1

For the people who decide to keep it. It is rock solid. Right? Yes. Because otherwise, they would give it back and no harm, no foul.

11m39s Speaker 1

Right. And the same thing, by the way, for Starlink. The people who have Starlink and decided to keep it are really happy with it. Because A, compared to the alternative, which was even worse, but then we see also in the number, you know, how long is Starling? Around two years?

11m55s Speaker 0

A little bit longer than that, yeah.

11m56s Speaker 1

But still, not a long time. In our data, we see that we had three times as many former Starling customers as we have existing Starling customers. In a two year time period or even a three year time period, that should give you pause and say like, okay, I'm glad that they're not holding them prison with contracts and things like that, but it's not for everybody. And so I think in doing the extended tour here, the scenic tour coming back to like beat and things like that, I think it is very easy to use Starlink and Elon Musk as a lightning rod and like, oh my god, we don't wanna have satellite everywhere. It doesn't work everywhere.

12m38s Speaker 1

Right? And we see it in our numbers, but there are use cases where it makes a lot of sense.

12m43s Speaker 0

Well, I'll go back to my comment about starving people loving food. Right? Yeah. There's certainly a place for Starlink. I'm still a little more dubious on the the bead aspect of that.

12m52s Speaker 1

Look at it this way. We have 335,000,000 people in The United States roughly. Wireless coverage is three twenty five million. There are 10,000,000 people, even today, living outside cellular coverage. Give them Starlink.

13m8s Speaker 1

No argument. Right? Yeah. But anyway, really positive for what Comcast has done here. You know, it just took fiber and it took FWA to get them to this point.

13m20s Speaker 1

But I don't think their customers will object.

13m22s Speaker 0

Right. I think it's a net positive, and it's good to see the industry moving, you know, one of the largest players in the industry moving moving towards more straightforward pricing.

13m31s Speaker 1

Yeah. Oh, Charter is now the biggest cable Internet provider. No longer Comcast, by the way. Charter passed them.

13m38s Speaker 0

Alright, Roger. We'll talk to you next week.

13m40s Speaker 1

Talk to you next week. Okay. Bye bye.