Question

SWOT Analysis: Tmobile and Sprint

Answer 1

The discussion on SWOT analysis:

Strengths

A particularly effective strength of T-Mobile is its commitment to providing quality customer service. This has served the company well in terms of both attracting and retaining customers. T-Mobile has repeatedly garnered awards for the quality of its customer services. This has served to effectively differentiate T-Mobile from its competitors when other features, such as plan pricing and handset availability (in terms of features offered), are fairly uniform across the industry

One of T-Mobile’s many strengths is their Go Smart Plan, which was introduced in December of 2013. This plan allows users unlimited access to Facebook, something that usually requires a lot of data. T-mobile has many strengths that set it apart in the wireless carrier market. One of these is Wifi calling. Wifi calling is the ability to make and receive calls/messages over a wireless internet connection. (T-mobile Support, 2011). This is a very attractive option for customers who are worried about coverage (as many potential t-mobile customers are), as you just need a wifi connection to make calls. Another Strength of T-mobile is their global coverage. T-mobile has the largest global coverage of all carriers, and does not charge any additional fees. Many customers need to call relatives in other countries or make international calls for business, and this feature of T-mobile’s service helps them stand apart.(T-mobile) T-mobile also has the fastest nationwide 4GLTE network. For customers looking for speed, T-mobile would be the clear winner. Their network reaches over 200 million people and 96% of all Americans. Many customers are concerned about being “in range,” and chances are, with T-mobile, you would be. One major strength of T-mobile is their competitive prices. T-mobile doesn’t charge extra for “going over your limit” (T-mobile) . This includes data and international calls. T-mobile doesn’t charge roaming fees, nor do they have annual service contracts. Also, T-mobile has the lowest price per month when comparing its plans to its competitor’s plans (Morran, 2013). Many other cell phone service companies charge an “upgrade” fee for new phones, or make you wait a long time before you can get a new phone without a fee. T-mobile started something called the Jump! program that allows the customer to upgrade their phone whenever they want. This program also includes replacement of lost or damaged phones (T-mobile). Obviously, consumers often want the “next big thing” and this often applies to technology. Offering upgrades whenever is incredibly appealing to consumer and allows them to keep up technologically. T-mobile has created the Go smart mobile program, which is a pre-paid phone program.

Weaknesses

T-Mobile has had problems attracting and retaining customers due to the spottiness of its network

outside of major metropolitan areas. When a cellular customer is forced to roam on another carrier’s network, there are often significant fees involved as well as a number of premium features, such as SMS, picture mail and on-line access that do not work correctly. T-Mobile’s current network coverage in rural and exurban areas is a weakness the company will have to correct if they wish to grow outside of their current coverage area.

T-mobile has many strengths that set it apart in the wireless carrier market. One of these is Wifi calling. Wifi calling is the ability to make and receive calls/messages over a wireless internet connection. (T-mobile Support, 2011). This is a very attractive option for customers who are worried about coverage (as many potential t-mobile customers are), as you just need a wifi connection to make calls. Another Strength of T-mobile is their global coverage. T-mobile has the largest global coverage of all carriers, and does not charge any additional fees. Many customers need to call relatives in other countries or make international calls for business, and this feature of T-mobile’s service helps them stand apart.(T-mobile) T-mobile also has the fastest nationwide 4GLTE network. For customers looking for speed, T-mobile would be the clear winner. Their network reaches over 200 million people and 96% of all Americans. Many customers are concerned about being “in range,” and chances are, with T-mobile, you would be. One major strength of T-mobile is their competitive prices. T-mobile doesn’t charge extra for “going over your limit” (T-mobile) . This includes data and international calls. T-mobile doesn’t charge roaming fees, nor do they have annual service contracts. Also, T-mobile has the lowest price per month when comparing its plans to its competitor’s plans (Morran, 2013). Many other cell phone service companies charge an “upgrade” fee for new phones, or make you wait a long time before you can get a new phone without a fee. T-mobile started something called the Jump! program that allows the customer to upgrade their phone whenever they want. This program also includes replacement of lost or damaged phones (T-mobile). Obviously, consumers often want the “next big thing” and this often applies to technology. Offering upgrades whenever is incredibly appealing to consumer and allows them to keep up technologically options include unlimited calling and texting, with two adding unlimited web (Gosmart program). The Gosmart program is designed for customers that are not ready to commit. Cell phone service carriers have become incredibly competitive since the industry’s beginnings. Now, many companies are offering deals to give customers money if they are willing to switch service providers. T-mobile is one of them. T-mobile is willing to pay 650 dollars of your termination fee, 350 for each line and 300 for each phone (Pagliery, 2014). This is an obvious strength for T-Mobile. They are legitimately promising that customers will like their services, and area allowing them to switch carriers for a much lower price.

Opportunities

There are many opportunities for T-Mobile to expand and to gain a sustainable competitive advantage. The first and most obvious opportunity is T-Mobile’s recent spectrum purchases for the deployment of third generation cellular technologies. T-Mobile officially received the spectrum on November 30, 2006 and they have already chosen the manufacturers that will provide the technical.

infrastructure. This means that they are now ready to go ahead and deploy 3G in the areas where they have purchased the right to operate. Another opportunity is that increasingly many cities and municipalities in the United States have started to be interested in the idea of citywide municipal WiFi networks. While many landline and cable telecommunications companies have fought this in the past, it is increasingly obvious that cities are viewing citywide WiFi as a service they are interested in providing. T-Mobile already has a track record in providing WiFi service in many locations nationwide. This is a great opportunity for them to expand their customer base and become a provider for citywide WiFi. Since there is a new generation of WiFi34 coming out that quadruples current WiFi data speeds and almost doubles the range of current WiFi technology, providing citywide WiFi offers not only additional revenue streams, but also a platform to expand their up-and-coming UMA initiative.

T-Mobile is the smallest wireless provider of the top four in the United States, while this could be seen as a weakness, we at RLK Partners, also view this as an opportunity. T-Mobile could, if it so chooses, expand to increase its share of the market, or potentially merge with another major provider. As we’ve seen in its history, T-Mobile was not afraid to merge with Metro PCS. Right now, Sprint has is interested in acquiring T-Mobile, which would be a unique opportunity to create a “super-provider” and catch up to Verizon and AT&T. T-Mobile is also perceived as having lesser quality service than some of its competitors. We do not understand the technology involved with wireless providers, but T-Mobile has the opportunity to change that image. If T-Mobile was able to improve its service, the public’s perception of the company would drastically improve. Similarly, T-Mobile could add new coverage plans to what it’s already offering. We’ve seen T-Mobile’s competitor Sprint increase its plans in the past year. The currently have a successful advertising campaign stressing the new plan. T-Mobile could also add variety to the plans customers can buy, thus improving its image as a customer-friendly company.

Threats

There are of course threats to T-Mobile. These threats come from the established players and

from municipal WiFi initiatives. First, as mentioned in the opportunities, many cities and municipalities are interested in offering free WiFi access either throughout their city or, at least throughout certain commercial or touristy districts. There are two local examples of this: OpenNet35 in Salem and OpenNet on Newbury Street in Boston. OpenNet offers free WiFi access to anyone with a WiFi enabled laptop, PDA or cell phone. Since T-Mobile offers pay-per-access WiFi access in many locations, including hotels and coffee shops, if citywide WiFi initiatives are launched, T-Mobile will likely be forced to end this service due to a drop in demand. The second threat comes form other carriers. While T-Mobile is not under the threat of being purchased by another national carrier, they are in danger of being somewhat marginalized by the business

The current top three wireless carriers are Verizon, AT&T, and Sprint. It doesn’t seem like Verizon and AT&T would ever merge, but one of them could potentially buy Sprint. This would create a huge problem for T-Mobile because one of the larger carriers (AT&T or Verizon) would become even more powerful, putting them impossibly ahead of T-Mobile. AT&T currently has 110 million subscribers, Verizon has 103 million, and Sprint has 54 million. T-Mobile is far behind the top two with only 47 million subscribers (Pagliery 2014). Therefore, if Verizon or AT&T acquired Sprint, they would gain 54 million new subscribers, putting them even further ahead of Sprint. This would make them even more powerful, profitable, etc., making it that much harder for T-Mobile to compete. Another threat to T-Mobile’s business would be a competitor improving their network and speed. As of right now T-Mobile has the fastest nationwide 4GLTE network (Kelly 2014), which partially explains their recent growth in customers. If another carrier, like Verizon, develops networks that match up to T-Mobile or surpass T-Mobile, the carrier will lost customers because the other benefits Verizon offers are currently more appealing. Pricing is a serious threat to T-Mobile. As of right now, they mostly appeal to customers because of their low prices and various gimmicks (paying customers to switch from AT&T, no annual contracts, etc.) Therefore, if one of the top three carriers drastically lowers prices to meet T-Mobile’s, there is very little reason for a customer to switch to T-Mobile or think about using them as their carrier in general. T-Mobile is number four; they do not have the best service or reach as many people as the top three carriers. Therefore, they need to have the best prices, an aspect that some customers can’t refuse. Another threat to T-Mobile’s business would be another carrier securing exclusive rights to a groundbreaking new technological advancement in the wireless industry. The release of the iPhone in 2007 was a prime example of this. The iPhone was first sold exclusively with AT&T (Kuittinen 20012). Since everyone wanted the iPhone, the other carriers suffered immensely in terms of profit/business until they finally struck deals with Apple and acquired the iPhone as well. If this happens again with a different product and only one or two carriers secure the rights (one of them not being T-Mobile), T-Mobile would fall behind in terms of gaining customers and could also potentially lose customersSWOT Analysis Chart Strengths Weaknesses . Wifi Calling *Image "Smallest of four largest carriers * Smaller marketing budget Largest global data coverage at no extra charge *Fastest nationwide 4GLTE network eption of edgy and aggressive Perc Use attack-like tactics for commercials Perception of customer service (reachi ing over 200 million people 96% of Americans) *Competitive Prices Jump! Program *GoSmart Plan *Incentives to switch to T-Mobile *Network Performance Opportunities Threats Merging Increasing wireless coverage Increasing variety of plans Two of the top three wireless providers merging AT&T and Verizon improving their networks and speed Competitors lowering prices A competitor securing exclusive rights to a groundbreaking new technological advancement in the wireless indust *Improving corporate image Reaching more people * *Expanding coverage for tablets