T-Mobile has set about reversing its weakness in the USA enterprise sector and targeting what it sees as a big opportunity for a comprehensive package based on midband spectrum in the immediate term.
As we reported last week, the operator has just unveiled three packages of service and tools to meet common enterprise mobile communications needs. These are T-Mobile Enterprise Unlimited, T-Mobile Home Office Internet, and T-Mobile Collaborate, the last being a suite of cloud-based business productivity and collaboration tools oriented towards mobile.
As so often, the operator cited changes in working practices engendered by the Covid-19 pandemic as reasons for the decision to launch an enterprise charge now and the focus on the home office package. T-Mo pointed out that 90% of US enterprises were now planning for employees working remotely at least three days a week, in keeping with many other developed countries.
Then the tone slipped as the firm blamed the “stranglehold” enterprise exerted by AT&T and Verizon for holding enterprises back in that endeavor (to which the riposte might be, ‘well where have you been then?’)
“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. “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.”
It is certainly true that the unanticipated boom in home working produced teething troubles and some of the buffering, jitter, dropped calls, frozen screens and disappearing video that Katz gleefully alluded to. But that cannot all be blamed on the doors of AT&T and Verizon, with some of the problems also endured by TMO’s smaller number of enterprise customers.
But TMO’s proposition certainly will attract interest since the ambition is not to usurp the existing fixed cable or DSL broadband service employees subscribe to, but to complement it with a separate, high-security connection dedicated to work. This would block access to consumer services such as gaming or video streaming, giving employees a clear demarcation between work and social activity or entertainment.
This will allow employees to work unhindered by activities engaged in by other members of the households and will appeal strongly to many enterprises. The staff may be less enamored, if it means giving up subsidies to their own broadband service they have been enjoying during the pandemic.
Apart from spotting an opportunity and deciding that the time for targeting enterprises has come as 5G rolls out, with promise of significant revenue gain, there are two other rather related reasons for the expansion in this front. One is that although TMO itself has little enterprise pedigree in the USA, Sprint which it acquired for $26bn in 2019 does, providing a strong base for a concerted attack. Sprint had itself bought large amounts of 2.5 GHz spectrum ideal for serving enterprise locations with high performing services in many urban, suburban and campus locations.
The second factor is that TMO’s parent Deutsche Telekom in Germany, and sibling operations in other European countries, have been ramping up their enterprise offerings, so TMO USA could in theory import some of these propositions directly.
DT in Germany has, like the country’s other telcos, been faced by enterprises deploying private 5G networks directly with infrastructure providers in unlicensed spectrum allocated by the regulator. It has responded by building a number of private 5G networks for industrial campuses on its own, working with Ericsson, which has shown more loyalty towards its traditional telco customers than Nokia. In these cases, it is integrating its public 5G network with the enterprises’ IT centers, storing data in an edge cloud.
The pitch here is that 5G accesses this data faster than either 4G, or WiFi. On the back of this, DT offers a managed service called 5G Campus Networks for smart factories, claiming this to be the first time a wireless package can match performance of a wired offering without the encumbrance.
Then in an interesting recent development, in November 2020 DT started a joint venture with SK Telecom of South Korea aiming to take a slice of the private enterprise equipment market themselves. This 50/50 partnership builds on collaboration established in 2016 between the two telcos, aiming to develop a 5G/LTE dual-mode repeater to extend coverage indoors.
The rationale is both to bolster the respective operators’ own enterprise strategies and also to tap a market for in-building distributed antenna systems (DAS) they reckon will be worth $10.33bn by 2023, growing at a CAGR of 10.1% until then. They noted this market currently lacks any dominant players and is ripe for the taking.
“Together with SKT we are able to develop new and innovative products which enhance customer experience,” said DT CEO Tim Höttges. “The first feedback from the repeater customer trial has shown the value of our partnership – for us, but more importantly, for our customers. We will start with the repeater, but this joint venture is aiming at a much higher goal: to create major innovations for both companies in the years to come.”
TMO USA is naturally watching with interest. Meanwhile, its Home Office Internet starts at $90 per line per month, while Enterprise Unlimited with T-Mobile Collaborate together start at $37per line per month. Companies can get T-Mobile Collaborate and unlimited talk, text, data with 5G access at a price closer to what its rivals charge just for the software or the line, T-Mobile contended.