When Consumer Perception Does Not Match Network Reality

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the three hundred and ninth episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner.

Roger Entner 0m21s

How are doing, Roger?

Guest Speaker 0m22s

I'm good. How are you?

Roger Entner 0m23s

Good. It's a busy news week. Wanted to start off with a new member at the FCC. Danielle Thummond has been nominated. Do wanna tell us about her?

Guest Speaker 0m32s

Sure. So Danielle is legal adviser to chairman Carr. And it's very interesting to see that Danielle is basically on the same track and footprints of her boss. Because chairman Carr was also legal adviser to chairman Pai and got then nominated as FCC commissioner. So I expect her to be approved.

Guest Speaker 0m59s

Right? Yep. Republicans are nominating a Republican. It usually works out. Maybe we have here a future FCC chairperson as well, or chairwoman.

Guest Speaker 1m10s

So I would expect, you know, basically, she was approved. She's working for chairman Carr. I would expect here somebody who thinks very much like chairman Carr.

Roger Entner 1m20s

So there's two Republicans, one Democrat, Anna Gomez Yep. Is the Democrat, and then chairman Carr and Danielle Thuman on the Republican side.

Guest Speaker 1m29s

So we're waiting for another Democrat.

Roger Entner 1m32s

Yep. But Anna Gomez can serve through the end of the term, so basically through 2027 or extend through January 2027, I believe.

Guest Speaker 1m41s

Yeah. She's sitting until when her term expires plus whatever the legislative cycle is.

Roger Entner 1m47s

Speaking of cycles, there's a NPRM that was just submitted for directive device, so satellite communications, to use the 2.4 and the 5.8 gigahertz bands for satellite. You wanna tell us a little bit about that?

Guest Speaker 2m1s

Well, it follows the drive of chairman Carr to make satellite communications a viable and strong competitor and to expand competition everywhere. When we look at home Internet competition, in the beginning, we just said DSL, the telecom industry dropped the ball and cable ran the table and got like 90% share. Then they dropped the ball and fiber comes in and now FWA and all of them making significant impact. And now comes satellite roaring here too. One of the projects that I'm doing is I'm getting literally every single home Internet provider that is available for my address, and I'm running speed tests on all of them.

Guest Speaker 2m56s

So that's Verizon Fires, Astound, Comcast, FWA from the three providers, AT&T, Verizon, T Mobile, and Starlink. And so it's gonna be really, really interesting to see how they all perform. I have already Starlink and Fios up, and I'm doing a 30 over 10 speed test just like the one that we do in our survey. We now do a speed test in every one of our survey. And so we're the only ones who can put both measurement and perception and have it in one instrument.

Roger Entner 3m34s

Right. So it's really interesting. Right? Because we can see what somebody actually has, right, and what their actual received speeds are, and then we also ask them what they have and what they think that they're getting. Yeah.

Roger Entner 3m45s

Those things don't always line up.

Guest Speaker 3m46s

Yeah. For example, so we ask people what do they have for home internet, and we ask them about wireless, of course. But for home internet, one third of people can't tell you what they have. But the people who tell you what they have, the faster it is what they have, the more happy they are. One of our first dashboards that we built is everything gets better with speed.

Guest Speaker 4m7s

But now we have also the speed test to it. And one third of the people who tell us what they think they have are wrong. Because some of them tell us they have fiber, and they clearly don't have fiber speeds based on the speed test. And some of people tell us they have DSL, and they clearly have fiber. Because the speed test is faster than anything that DSL can deliver, which has really, really interesting public policy implications.

Guest Speaker 4m37s

Because suddenly, what we're showing here is you can't rely on what people tell you what they have. Because we can factually show that they're wrong in at least one third of the case, and you don't know which third. Right?

Roger Entner 4m50s

Right. Well, we know we know. Know. Right? Right.

Roger Entner 4m53s

I mean, like, we've known for a long time just by virtue of filtering everybody by footprints and things like that. We have a pretty good idea in terms of whether somebody can have something in a given geography relative to what they say. And so we allow people to say, I don't know. Right? Because, I mean, there there are lots of people, I think, that don't know or have no reason to wanna know what their specific technology is.

Guest Speaker 5m13s

Yeah. I don't know and I don't care is a legitimate answer.

Roger Entner 5m17s

Totally. 100%. 100%. But it's interesting to also see folks who think they might know that definitely don't. Right?

Roger Entner 5m24s

Yeah. And I I agree with you. Think policy implications are really, really, really important here.

Guest Speaker 5m29s

Really important here. For example, we also are not asking people what device they have because they either don't know or they tell you iPhone, Android. And we're like, thank you very much. Right? Really doesn't help.

Guest Speaker 5m41s

You know, we looked at this, and you and I did this, and we're like, we're not playing a technology guessing game here. We only will do this if we can passively collect it. And then we figured out a way how we passively collect the device that people are using to take our surveys on.

Roger Entner 5m59s

Well, mean, that also opens the door, you know, like, let's say we identify the device, you know, we do in 90% of folks who take our surveys on mobile, we do identify that device. And even if somebody did know that they have, like, the specific model of Android device or or an iPhone, you know, 17 Pro Max or whatever, they couldn't tell us, you know, what the Wi Fi controller is, or they couldn't tell us the chipset inside of it. Right? And so we're also passing that data through. And, again, you can see the differences in terms of perception versus the actual components and how they perform.

Guest Speaker 6m29s

Here's, like, something really interesting. This is based, quote, unquote, only on 4,300 speed tests. So I looked at Apple devices, Qualcomm Kryos, ARM Cortex budget devices. So these are budget Android devices. And looked at the speed tests that we get.

Guest Speaker 6m52s

On T Mobile, a 161 megabits for T Mobile. For Qualcomm, like premiums, it's a 160. For the budget devices, it's $1.56. It's a delta of five megabits. For AT&T, it's a 153 for Apple, a 152 for the flagship Qualcomm's, and a 133 for the budget devices.

Guest Speaker 7m15s

So that's a delta from flagship to budget of 20 megabits per second. On Verizon, Apple is one nineteen, Qualcomm flagship is one twenty four, and ARM is 89. That's a delta of 35 megabits per second. I don't know what's going on. This is very early on in the research that I'm doing.

Guest Speaker 7m36s

Right? Only four and a half thousand tests. But it's certainly something I wanna look at much more closely. And we've seen it in other places where when people think like, oh, I can get a cheap device, and I get the same experience that I can get on a flagship device. No, you don't.

Roger Entner 7m54s

That always the case. Yeah.

Guest Speaker 7m56s

You don't. And the network is the same, and it behaves different on different devices. Really, really interesting. Anyway, there's more interesting stuff than the things that we do.

Roger Entner 8m7s

Yeah. We were talking earlier about the Optimum results. So you wanna talk through that real quick?

Guest Speaker 8m12s

Yeah. So Optimum is working really hard on turning around its metrics. Wireless, which was not doing very well, is now doing very well at Optimum. So they finally cracked the code to do this well, and they're doing this. Their subscriber losses are getting less.

Guest Speaker 8m32s

They won a big MDU contract. So operationally, things are turning in the right directions. They have a huge debt overhang. There's 2 and change billion dollars due next year, another 2 and change billion the following year that they need to finance and fund. They broke the company apart on paper, where they broke apart the East and the West.

Guest Speaker 8m56s

The Eastern, which is like basically the tristate area for New York, is protected from the bankruptcy, whereas the Western parts of it are not. And it's, by the way, a pretty natural division within the organization. And so Drahi, who put this all together, he funded a lot of this through debt, and that's why we see this debt overhang.

Roger Entner 9m19s

Well, and the timeline for that is in, I think, April 2027 is where the big maturity comes to.

Guest Speaker 9m25s

Yes. And so he has just gone to the breakup of SFR. He also bought SFR with debt, and the debt mountain as the interest rates went up were just so big that SFR, the second largest French carrier, has just been carved up between the other three providers. And I think a lot of the focus time was dedicated on that. So now that this has been largely wrapped up, I think the next topic that he has to focus on is the refinancing of the debt here of Optimum.

Guest Speaker 9m59s

And so we'll see how that plays out. But operationally, things are turning into the right direction, which is a good thing.

Roger Entner 10m5s

Yeah. I mean, I think it's hopeful, particularly on the wireless side. What's interesting about these guys is unlike, you know, your Comcast or your charters who sit on the Verizon network, they're actually sitting on the T Mobile network, but they're in Vietnam. So, you know, the differences in terms of networks there might play a role as well. But adding 49,000 lines is not shabby for a cable company of their size.

Guest Speaker 10m27s

Yeah. No. They're doing very well. And T Mobile has a has a great network. I think nowadays, it doesn't matter anymore on which network you're on.

Guest Speaker 10m36s

I spoke at the NCTC conference, and NCTC does a really great job in bringing the MVNO or an MVNE to its members so that even the small rural telcos can have an MVNO. It was really interesting. I was moderating one panel, and I was speaking on the other. One of the gentlemen said, like, why should I do this for $8 profit a month? And the answer is, a, it extends the lifetime, b, it plugs your customer base.

Guest Speaker 11m9s

Because he's like, I have fiber, nobody is leaving anyway, so why that? But, hey, if they have one of the mobile providers, that mobile provider is relentlessly whispering in their ear, come to me. Come to me. And it gives them an avenue and a way to communicate with your client. And you don't wanna have that.

Guest Speaker 11m31s

Just shut it out. Right? Offer them wireless. You get eight dollars more profit a month, which is not too shabby over ten years.

Roger Entner 11m40s

Well, and the reality is most people don't switch wireless companies for fun. Right? I mean, maybe you and I do. Yeah. But most people don't.

Roger Entner 11m47s

Right? And so if you are providing a good service and, you know, you should want folks to bundle. It makes them stickier if there's a turn risk. If there's not, you know, it's just a better relationship to have. Right?

Guest Speaker 11m57s

I don't have to switch anymore because I have everybody. Right? The question doesn't become who do I where do I have my primary line? It's not like. Right?

Guest Speaker 12m7s

And so we buy our connections and that way we can do with it what we want. And we get the real customer experience. It's like whenever an issue is, I call regular customer service because I wanna know how regular people get treated. Now I have a get out of jail card because I know the right people and get them the better customer service quicker, but I don't wanna rely on that. When my mother died and my son came for the funeral, due to no fault of his own, the international roaming got turned off, and he came back and had like an $800 bill.

Guest Speaker 12m42s

He said, like, dad, what am I gonna do? I said, like, why don't you call customer service and get it fixed that way? And if it doesn't come to me, I'll pull the ripcord. And so he went through the experience, and the customer service rep was like, yeah, you know, we can cut half of it off. And, it was not your fault, but I can't give you the entire credit.

Guest Speaker 13m5s

You pay this and we give you this often in installments. And he's like, no, I'm not gonna do that. And he's like, yeah, good luck trying. Well, I informed one of my friends with who he is. He got elevated to the right customer service, and a magic wand got waived, and he got his money back.

Guest Speaker 13m24s

It's important for us to know what everybody does. Fortunately, we know and we help other people paying what they're supposed to pay and getting the treatment that I think everybody should have. So we're not, like, just pulling privilege. We're helping others too. I'm sure now my email box will open up and, like, what's wrong?

Roger Entner 13m45s

An email if you need help

Guest Speaker 13m46s

with the wireless bill. I'll do my best.

Roger Entner 13m49s

We'll talk to you we'll talk to you next week.

Guest Speaker 13m51s

Okay. Thank you.