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

Full Transcript

0m10s Speaker 0

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

0m22s Speaker 1

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

0m24s Speaker 0

So Roger, this week we're pleased to kick off our titans of prepaid series where we talk with power players in prepaid. We've got a great guest to get us started. Nancy Clark is the president of Verizon Value. Nancy, welcome to the podcast.

0m36s Speaker 2

Oh, thank you so much for having me. I'm gonna tell you that that's probably the first time I've been called a titan. I'm gonna bask in it for about ten seconds and then move on.

0m46s Speaker 1

Well, you have made such an impact already since you've taken over as president of Verizon Value in January. Prepaid has always been a little bit of an afterthought at Verizon. But then Verizon bought TracPhone and you become one of the biggest players in it. But you struggled initially. Since you've taken over, prepaid has done a lot better.

1m11s Speaker 1

How did you view that market and how did you turn things around?

1m15s Speaker 2

Sure. So let me start with the second half of the question, which is, you know, the turnaround. We're pleased with our results that we've seen. They're better in second quarter and in third quarter in terms of our customer growth. So we've done some good things.

1m29s Speaker 2

What we did, I've had the opportunity to join the team in January. And January was a pivotal moment. You know, of course, had made the TracFone acquisition and we, you know, have been working to pull together Verizon Prepay, our Visible brand that we stood up, as well as all the TracFone brands. But we stepped back in January and we said, we're really gonna make an investment in this business, the totality of Verizon value. We invested in leadership, in talent, in roles, in capabilities.

1m57s Speaker 2

We also invested in having very clear priorities for the business, and I can take you through some of those. But most importantly, we focused on our brands and the relevance of each brand. You know, this prepaid portfolio, I think about it as the ultimate in segmentation. And if you take a step back and you look at the, you know, eight or nine brands that we have in the market and really think about who is the consumer, what's the value proposition that we come to market with, and how are we relevant in our path to market and our distribution? You know, one of the things that we did is we created a really clear brand map of where the customers were, and then said, Let's take each one of our brands and figure out exactly where it fits and sharpen and hone our focus on it.

2m45s Speaker 2

So I think that that's been one of the real key breakouts that's allowed us to see some success early on.

2m51s Speaker 1

Yeah, because like TracFone had like, before you bought them, like 18 brands or something like that, it was like the whole basket full of different brands. And we were like, that's not going to survive. And you sharpened the pencil and looked at these segments. But yeah, how did you prioritize these things?

3m9s Speaker 2

Sure. So if you think about all the brands that we have, there are about, I think, 11 brands today that exist within the portfolio overall. We actively market seven of those brands. The other brands, you know, we've got wonderful customers that are on them. We continue to serve them and deliver a great experience.

3m29s Speaker 2

But in the marketplace, there's seven brands that we focus primarily on, and it's creating the distinctiveness of each one of those brands. And I'll just give you, you know, maybe a few examples. So you think about the Visible brand, really built for digital savvy, self starter customers. So creating a magnificent digital experience for them, but keeping it clean, easy, straightforward. That's one thing we do.

3m54s Speaker 2

The Straight Talk brand has a fabulous history in rural America, a Walmart loyal shopper, so really making sure we show up in Walmart well with that brand, and again, that it fits families and individuals with a great Verizon coverage there. And then in the mid part of this year, we completely refreshed the Total brand, the Total Wireless brand. We went back to some of the heritage of Total Wireless, and that brand is designed for the customer that lives in a metro market that is hardworking, but they really rely on their phone. And so we were able to bring some of the best in class data capabilities to those customers. No throttling, no capping, no deprioritization.

4m37s Speaker 2

So they get a value price, but also a great quality service. So that's some of the work that we've done.

4m42s Speaker 1

No, that's fantastic. And to a certain extent, some of the brands are coming home. One of my favorite memories of my work history was like fifteen years ago, I was presenting to Jack Plating, and you Very remember him,

4m58s Speaker 2

well, I do. He's great.

4m59s Speaker 1

A great guy. I was presenting and showing him about the impact that Straight Talk had. And he was not that happy because of the great affinity that Straight Talk had and has with the core brand. Yeah, he had some choice words. You remember him.

5m19s Speaker 1

He was a straight shooter.

5m20s Speaker 2

He really was. But again, Straight Talk has an incredibly loyal customer base. You know, I spent part of my career serving rural America, you know, in the Upper Midwest. And, you know, I remember similarly, you know, there was a core Verizon brand, but Straight Talk was really, you know, the second most popular brand in those markets. And so, again, being able to lean back into that heritage and bring the brand to life in a super relevant way is what we're working on now.

5m48s Speaker 1

Yeah. No, it's fantastic. You know, also before leading Verizon value, you spend a lot of time in various customer service roles. How are you leveraging your experience there into leading value?

6m4s Speaker 2

Yes. So I've done quite a few things within Verizon, and I've had the privilege to do that. I've worked in finance. I've led several of our markets. I've worked in marketing.

6m14s Speaker 2

And then over the past five years or so, led our global customer service organization. There were a few things that happened within that team that I've been able to carry forward. One is we went through a tremendous amount of transformation last year. We completely redesigned the entire organization, every role that every team member had, and really aligned it with where the customer was in their journey, and then put some best in class technology and tools and capability in place. One fun fact is the team just won the customer service organization of the year award from Reuters just most recently.

6m52s Speaker 2

But that transformation, I would say two things. One is the focus on the customer. If you stay close to your customer, you are guided well on what you build out. In this case, it's brand, it's experience, and it's, you know, again, how we show up with our distribution partners. And then secondarily is just the ability to lead a large and quick transformation.

7m15s Speaker 2

So I was able to do that with the customer service organization. And with the team that we stood up, you know, in first quarter of this year, collectively, we've been moving really fast on how we modernize this organization and make ourselves really relevant in the market.

7m30s Speaker 1

Yeah. The transformation is really noticeable since you've been there. You know, another topic is we've done a lot of research about it. There's a lot of talk and interest about it, how the market is kind of blurring, right? You know, versus MNO or carrier, prepaid versus postpaid.

7m52s Speaker 1

You know, how do you view this? And how do your brands fit into the overall brand strategy?

7m59s Speaker 2

Sure. So, I think what's great about this, first, I have been through this exposed to so many different communities that serve, you know, wireless customers. So you think about the MVNO community. I get to be a part of that because of our TracFone heritage. And they're just great.

8m16s Speaker 2

They're scrappy, they're competitive, they're hyper local, they understand the market. But I do think that the lines are blurring. If I think about, you know, how does my team work with our Verizon network team to bring experiences to life for our customers, it's fairly similar to how the Verizon postpaid team does it. You know, I count on our Verizon network team to build a best in class network. I have great confidence that they will do that.

8m42s Speaker 2

And then it's about, you know, choosing from the menu of options that are available when we build our value proposition. So, you know, that's one piece of it. And then I also do think that the lines between prepaid and postpaid are blurring. I think some of those categories are they're convenient for when we talk to analysts and that sort of thing, but they don't know that they're as relevant for the customer. And what we really wanna build is a service that, sure, it's pay in advance, you pay your bill in advance, but we wanna serve customers over the long term with these brands.

9m14s Speaker 2

And that may mean that we bring, you know, new features or new options to customers that aren't traditionally available with prepay.

9m22s Speaker 1

I often look at it this way. It's like the difference between prepaid and postpaid is largely like, do you pay your second bill? Right?

9m29s Speaker 2

But you know, here's here's what I would say. What we know is we have transient there's there's short term customers. There are some transient customers in the prepaid market. But we have so many long term customers on our brands. We have customers that have been with us five years, ten years.

9m45s Speaker 2

They wanna continue to be served by that brand. So you can be a short term customer, but we also wanna serve you over the long term.

9m53s Speaker 1

And churn has come down so much over the last couple of years.

9m58s Speaker 2

It has. It has. And, you know, I think you know, and you noted on some of your other programs, Verizon's really putting an emphasis on churn. That's true in our postpaid business, but equally so in the value business. We've really been shoring up our capabilities to understand our customers, to know how to communicate to them at the right time, to meet their needs throughout their journey so that we can build that long term loyalty.

10m22s Speaker 2

You know, we were able to recently with both Straight Talk and Total Wireless, as we refresh the value proposition, if you stay with those brands for twelve months, you earn $200 off of your next phone that you wanna move to. So those are some of the things that we're bringing.

10m38s Speaker 1

I think that's really appreciated, because the biggest difference between prepaid and postpaid is the device, the cost of the device.

10m46s Speaker 2

Yes. I mean, you know, what is the customer? How much does a customer wanna spend on a device? The availability of credit for the device and those sorts of things. But again, there's a way for us to serve the customer and to make sure that their equipment is updated as they go through their life with a carrier.

11m3s Speaker 1

Yeah. I have another question. You know, like T Mobile, and T Mobile just bought Mint. It's been very loud in the market and running a little bit roughshod over everybody. And probably in prepaid even more than in postpaid.

11m19s Speaker 1

Can you tell us how you're pushing back?

11m21s Speaker 2

Absolutely. You know, one of the lines I always go to in our credo is that our competitors are not enemies, but they are our challengers. So it's great to have great challengers in the market. But we we are showing up and, you know, we wanna be a force to be reckoned with, you know, in prepaid and in the value business. We have almost 20,000,000 customers that we serve across all of our brands.

11m45s Speaker 2

And, you know, I mentioned the Total Wireless brand as an example. We had a pretty significant refresh of that brand in the middle of this year. We completely refreshed how the brand showed up visually. We refreshed our value proposition to bring unlimited data to our customers, to have the device offers, and really pleased with that. We've also been expanding our distribution, and I think it's remarkable.

12m11s Speaker 2

In just two years, we have a thousand stores that we've been able to grow and expand in markets all across the country, and we're not done. You know, we're opening them up at rate of, you know, two to three a day. So we're really excited to be building this dealer community.

12m27s Speaker 1

Distribution is such an important component in selling to customers, especially in the prepaid segment.

12m36s Speaker 2

It is. And it's super local. It's super hyper local. We love it. We love our small business owners, our dealer community, and we're working to get feedback from them every single day on how we better serve the customer and how we better bring tools to them so that they can be successful in the market.

12m52s Speaker 1

I'm looking forward to hearing a lot more on your success in earnings calls, and hopefully you come back sometime and tell us how this is moving. Thank you, Nancy.

13m2s Speaker 2

I'd love to do that, and I hope that we give you lots to talk about in the future.

13m6s Speaker 1

Looking forward to it.

13m8s Speaker 2

Okay.

13m8s Speaker 1

Thank you, Nancy.

13m9s Speaker 0

Thank you. Roger, we'll talk to you next week.