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

Full Transcript

Don Kellogg 0m10s

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 Entner.

Roger Entner 0m22s

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

Don Kellogg 0m24s

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?

Roger Entner 0m34s

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.

Roger Entner 0m55s

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.

Roger Entner 1m14s

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.

Roger Entner 1m33s

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.

Roger Entner 2m16s

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

Don Kellogg 2m21s

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

Don Kellogg 2m30s

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.

Don Kellogg 2m46s

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

Roger Entner 2m53s

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?

Roger Entner 3m11s

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.

Don Kellogg 3m33s

Terabytes.

Roger Entner 3m34s

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

Roger Entner 3m39s

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.

Roger Entner 3m59s

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?

Don Kellogg 4m15s

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

Roger Entner 4m19s

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.

Roger Entner 4m36s

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?

Roger Entner 4m48s

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.

Roger Entner 5m6s

That is a very impressive offer. Right?

Don Kellogg 5m10s

Mhmm.

Roger Entner 5m11s

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.

Don Kellogg 5m26s

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.

Don Kellogg 5m39s

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.

Don Kellogg 5m53s

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.

Don Kellogg 6m12s

It's absolutely positive.

Roger Entner 6m13s

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.

Roger Entner 6m21s

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.

Roger Entner 7m5s

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

Don Kellogg 7m11s

Mhmm.

Roger Entner 7m11s

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.

Roger Entner 7m21s

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?

Don Kellogg 7m31s

Right.

Roger Entner 7m31s

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

Don Kellogg 7m37s

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&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.

Don Kellogg 7m59s

Yeah.

Roger Entner 8m0s

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?

Don Kellogg 8m24s

Mhmm. Mhmm.

Roger Entner 8m25s

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.

Roger Entner 8m38s

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?

Roger Entner 9m0s

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.

Don Kellogg 9m25s

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

Roger Entner 9m27s

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

Don Kellogg 9m36s

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.

Don Kellogg 9m56s

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.

Roger Entner 10m5s

To be atrocious to their customers.

Don Kellogg 10m7s

Right. Because they can leave now.

Roger Entner 10m9s

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.

Roger Entner 10m21s

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.

Roger Entner 10m36s

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.

Roger Entner 11m1s

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.

Don Kellogg 11m30s

For the people that decide to keep it.

Roger Entner 11m32s

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.

Roger Entner 11m39s

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?

Don Kellogg 11m55s

A little bit longer than that, yeah.

Roger Entner 11m56s

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.

Roger Entner 12m38s

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

Don Kellogg 12m43s

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.

Roger Entner 12m52s

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.

Roger Entner 13m8s

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.

Roger Entner 13m20s

But I don't think their customers will object.

Don Kellogg 13m22s

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.

Roger Entner 13m31s

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

Don Kellogg 13m38s

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

Roger Entner 13m40s

Talk to you next week. Okay. Bye bye.