The enterprise field is quickly becoming the most intense battleground between the big three US cellcos as they strive for distinctive positioning around their perceived strengths. T-Mobile has been the most vociferous recently because it is starting from the lowest base of 10%, compared with its 25% of total wireless subscriptions in the country, and is desperate to register customer gains against both AT&T and Verizon.
This has led to various recent moves, including the unveiling early March 2021 of T-Mobile WFX, comprising three packages designed to tap into the rise in home working and remote collaboration during the Covid-19 pandemic. These are T-Mobile Enterprise Unlimited, T-Mobile Home Office Internet, and T-Mobile Collaborate, the latter involving a partnership with San Francisco based enterprise software firm Dialpad to incorporate the operator’s 5G network more tightly into its offering.
The wider message was that T-Mobile was raising its game in enterprise 5G after a rather lackadaisical start that had led to falling behind its rivals. It was also hitching enterprise to its established “’Un-carrier’ marketing strategy, designed to highlight progression towards more ‘grown-up’ customer relationships and contract arrangements that do not penalize users for uneven data traffic patterns, for example.
T-Mobile also emphasized the problems employees have been experiencing working from home such as buffering, jitter, dropped calls, frozen screens and disappearing video, taking the chance to lay into its rivals.
“The old carriers are still using their 91% market share to feed business and government a very expensive starvation diet of old technologies, old plans and hidden fees,” said Mike Katz, EVP of T-Mobile for Business, at the time. “With T-Mobile WFX a 5G network that is faster and covers more area than AT&T and Verizon, we’re on a mission to loosen the carriers’ death grip on enterprise customers, so we’re bringing that same disruptive, customer-first approach that made the Un-carrier the fastest-growing, most-loved consumer wireless company over the past seven years and counting.”
Yet WFX was really just closing the gap on rivals in the generic enterprise space, almost a ‘me-too’ offering. We see TMO’s latest collaboration just announced with Lumen Technologies, formerly CenturyLink, as the lynchpin of its campaign to win new business around the industrial IoT (IIoT) where 5G and edge computing come together.
This is significant, initially just in the USA, since Lumen is not just a technology partner but will also give TMO access to an established base of enterprise customers, as Lanz indicated. “Customers will be able to access Lumen’s “hundreds of thousands of on-net enterprise locations on the Lumen fiber network using T-Mobile’s 5G network”.
As this statements hints, the deal is important also for Lumen, perhaps more so.
Lumen has roots dating back to 1967 as a telecom provider in Louisiana state, then after numerous acquisitions ended up as CenturyLink, before the most recent name change. It now offers a combination of local and long distance services, including voice, broadband, MPLS, private line, Ethernet and hosting. It also expanded internationally in the enterprise arena, gaining customers in Canada, Latin America, EMEA and Asia-Pacific, in the process building one of the world’s largest IP backbone networks with global reach.
At the same time though, it has struggled to capitalize on those assets in an enterprise market increasingly tilting towards provision of complete service packages, rather than distributed infrastructure assets and long distance wireline communications provision.
It is notable that over the past four years, Lumen’s stock price has been declining steadily, halving in value since 2017, while many of its rivals have soared, T-Mobile USA’s price having risen steadily and doubled since the start of 2019. Even AT&T and Verizon with their troubles are more or less where they were a few years ago after a more turbulent ride.
Lumen has also lagged in the wireless area, which is why its collaboration with T-Mobile is essential to exploit its infrastructure in the IIoT era. In that light Lumen’s earlier survey of 1200 IT professionals in 10 countries on their attitude to edge compute and 5G makes interesting reading, seeming to be geared towards elevating the importance of the former over the latter.
Almost 75% of these IT pros indicated that 5G needs edge compute more than the other way round. Even more, 82%, insisted 5G needs edge to deliver on performance, while 90% said they would move applications from the center to the edge if that was now available.
This was not surprising in the sense that these managers also underlined the growing importance of low latency for their operations. Almost 60% of these IT pros said they had applications now demanding latencies of 10 milliseconds or less for their applications, and one in five required under 5ms.
Yet while these factors make edge compute a clear choice for many workloads, a growing number of them in manufacturing and robotics can only be served by wireless communications and that effectively means 5G at present. 5G is way ahead of its predecessor 4G/LTE but also of WiFi, even in the latter’s current sixth generation. It does not make much sense to separate the communications from the edge compute as they really are part of the same whole. It is indeed true that 5G can only meet those ultra-low latency demands in conjunction with edge compute but the converse is also true for use cases that can only be served by wireless.
A more significant finding from that Lumen survey was security being cited as the main factor holding enterprises back from to embrace edge compute and 5G more enthusiastically or rapidly than they are doing. Of those IT people surveyed by Lumen, 54% expressed serious concerns over security relating to 5G and 61% in the US. This perhaps underpins the reticence over deployment of 5G in new critical use cases around the IIot where wireless has not been a contender before. We have written before about the extra security employed under 5G, but against that are the more serious consequences of breaches, coupled with exposure to more sophisticated attacks, from countries as well as criminal groups and mischief makers.
That is why in that Lumen survey 81% of the IT decision makers, and 85% in the USA, indicated that perimeter-based security was no longer sufficient for their business. To some extent these comments were in answer to questions constructed by Lumen to illuminate its own edge security products, but they do highlight real concerns. Now T-Mobile will be hawking these products as part of its expanding enterprise portfolio.
The international reach of Lumen’s infrastructure was also a factor in drawing T-Mobile USA in. The operator is loosely part of the Deutsche Telekom empire which itself has global ambitions. DT is the largest shareholder in T-Mobile USA with a 43% holding, Japanese conglomerate Softbank Group owning 24% with the remaining 33% publicly owned.
As we reported last week, DT itself is pursuing a leading role as a systems integrator bringing in all the components and tools required to deliver a complete industrial IoT service around a private network. Here DT seems to be pitching at slightly smaller enterprises than the very big manufacturers, such as Bosch and Volkswagen, that have already determined to build their own private networks in the belief this will maximize performance and security.
Similarly, T-Mobile USA is targeting slightly smaller enterprises through its partnership with Lumen.