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 sixth episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology from Recon Analytics. I'm Don Kellogg, and with me, as always, is Roger Entner. How are doing, Roger?

Roger Entner 0m22s

I'm great. How are you? I'm

Don Kellogg 0m23s

good. So I thought we could do something a little bit different today. The Mint Mobile acquisition by T Mobile was finalized on May 1. And as of the q two carrier reporting, you know, we kind of got an opportunity to look under the hood in terms of what T Mobile bought. As you know, we've been tracking Mint for quite some time.

Don Kellogg 0m46s

So I thought we could do a pod and talk about them. What do you think?

Roger Entner 0m49s

It's a success story, right, when we look at Mint. When they announced the deal, Mint had around 2,000,000 customers. When they closed the deal about a year later, Mint had three and a half million customers. They have been really disruptive on the prepaid side. And, you know, they were unreported previously, and so we looked at the market, and saw like a lot of changes in prepaid, and also looked at how much is their prepaid to postpaid migration, Mint has been like the shark that has been eating the little fish in the prepaid market, much more so than I think most people, especially in the financial market, have recognized.

Roger Entner 1m38s

So they had like their best quarters ever while they were being bought, right? And going through that, and so that's a really big compliment to the whole old Mint team that didn't take the foot off the accelerator when, you know, oh, here's a payday. Apparently the payout must be really good. So they're gonna stick around for a while.

Don Kellogg 2m3s

Right. So I mean, we know there are lot of performance incentives associated with that deal. Consistently, we've seen, you know, Mint as the highest satisfaction provider that we track, or one of the highest. Right?

Roger Entner 2m15s

Yeah. One of the highest.

Don Kellogg 2m17s

It tends to toggle between Mint and consumer cellular. Two very different businesses, I would say. The d to c model, which they're both doing, I mean, obviously, you can get some top off cards and things like that, but they're not going out with thousands and thousands of stores.

Roger Entner 2m32s

They're no total by Verizon.

Don Kellogg 2m35s

Yeah. It's a different story. Well, it's not total by Verizon, but it's not Metro or Cricket either. Correct. I think one of the things that we've seen in prepaid is there's been this kind of bifurcation in terms of how you reach the customer.

Don Kellogg 2m45s

Mint is primarily an online brand, whereas Metro and Cricket have very large distribution footprints, both for the purposes of selling the service, but also so that people can walk around the corner and pay for that service.

Roger Entner 2m58s

You know, we run these huge NPS programs, and you see the differences, Especially with the in store purchasing experience and account support in the store where Cricket and Metro are outperforming Mintz. Because it doesn't have stores and then you have to rely on the big box retailers, and they're over and over we see this are not very good retailers. We've seen it with Starlink, we're seeing it here, compared to their own stores, own stores are outperforming, or branded stores, it doesn't even have to be owned stores, branded stores are outperforming big box retailers, and would take us.

Don Kellogg 3m40s

Right. A branded store is focused on one thing, whereas a big box retailer is selling tens of thousands of SKUs. Right? Yeah. So it's a different business.

Don Kellogg 3m49s

But I I do think it's worthwhile to dig deeper into the kind of the business model for Mint. Can you talk a little bit about kind of what we see in terms of the primary differences between d to c and the more traditional retail operations?

Roger Entner 4m2s

They have cracked much more the code of how to do support either online, and Mint has the highest score in our database for mobile online self help. And they're really strong in support over the phone because that's the way they interact with their customers. But overall, why do people buy Mint? Right? We've done research around it.

Roger Entner 4m29s

And Don, you can talk about that.

Don Kellogg 4m31s

Yeah. So, I mean, we did some work a while back looking at consideration sets. Right? So one of the things that we ask is if your current provider wasn't available, who would you consider? And we allow folks to select up to three or four different providers that are top of mind that are specifically not their provider.

Don Kellogg 4m47s

What we found, and I think this makes a lot of sense within the context of the T Mobile acquisition, was that Mint had much, much, much higher consideration than you would expect them to have given their kind of size and market. Right? So they're punching way above their weight in terms of consideration. And what's interesting is it's actually happening on both the prepaid and the postpaid side. I feel like there used to be a little bit of a stigma around prepaid.

Don Kellogg 5m12s

They seem to have gotten around that, right, where there's lots of postpaid folks that are willing to consider them in addition to prepaid. When we look at the number of different alternatives folks are researching, the folks who eventually land at Mint research the most providers. Right? So that tells me that from a deal and from an incentive perspective or just a value perspective, right, they compare favorably to a lot of other options at market. There's the folks that do their homework are choosing Mint.

Roger Entner 5m38s

Yeah. And what was also interesting is like, why do people buy mint? It's a lot of data for not a lot of money. And mint is a price leader or is the price leader in prepaid.

Don Kellogg 5m54s

Yeah. I mean, we did some other research recently looking at value ads and, you know, kind of additional ancillary perks, whatever you wanna call them. Right? Like, you know, T Mobile's got their status program. Verizon has something similar.

Don Kellogg 6m6s

All the major MNOs have some flavor of kind of extra things you get. The folks that we saw at Mint were least concerned with things like that. Right? So from a kind of bare bones, I just want service and data, phone and data, the Mint folks are typically not looking for that. And I think there's a perception there that that drives price up.

Don Kellogg 6m25s

Right? And so they're just not playing that game, which, you know, not everybody needs perks. Right?

Roger Entner 6m30s

Yeah. No. You're absolutely right. In a way, hope Aaron North, the CMO of Mint who is a friend, isn't getting paranoid that, you know, we're checking him out all the time from behind. Anyway, it's it's a success story and now they're with T Mobile.

Roger Entner 6m46s

I can't wait to see an ad with Ryan Reynolds where he does something for T Mobile and not just for Mint.

Don Kellogg 6m54s

Yeah. I think the only thing I'm worried about is that I don't think that the Mint color scheme and T Mobile's magenta go very well together. Yeah. But, you know, so there's definitely It's

Roger Entner 7m3s

the least of all the problems.

Don Kellogg 7m4s

Some different branding there, but both brands have been wildly successful. So congrats to the Mint team.

Roger Entner 7m11s

Your continued success. Right?

Don Kellogg 7m13s

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

Roger Entner 7m17s

Thank you. Bye bye.