The Unsustainable Nature of T-Mobile’s UnCarrier Philosophy

by Matt Klassen on January 30, 2015

T-Mobile’s ongoing UnCarrier marketing plan has had one ultimate goal: take the unnecessary confusion out of the wireless industry. Under the watch of eccentric CEO John Legere the company has rolled out several phases of its UnCarrier revolution over the last few years, going as far as to abolish overage fees, early cancellation fees, contracts, subsidies and a host of other industry staples. Now there’s no question that these ongoing promotions have helped T-Mobile revive itself in the wireless market, but one has to ask, how long can the company keep up this pace?

The problems I see with T-Mobile torrential pace of new promotions are twofold: First, despite its desire to simplify the wireless marketplace, T-Mobile is, in essence, muddying the waters with its unending onslaught of new gimmicks, deals, and paradigm altering changes. Do new customers to T-Mobile want to sign on to Jump, or enrol in Score, or utilize Data Stash, or sign-up for one of the company’s no-contract plans? Truly one needs an industry professional to parse the unending marketspeak, catch phrases, and promotional offerings.

Second, while T-Mobile’s different programs are clearly geared towards different economic demographics, one has to wonder how long can T-Mobile juggle this many promotional balls? With so many programs running simultaneously, and with the company losing money on these promotions in order to attract new customers, will T-Mobile simply burn itself out before it’s able to achieve some sort of steady customer base on a stable (and profitable) marketing foundation?

Promotions are great for garnering attention in the marketplace, the only problem is that promotions are, by their very nature, temporary, and given how central T-Mobile’s ongoing UnCarrier promotional campaign is to the company’s recent success, one has to wonder how it’s ever going to transition out of this promotional phase and into something more stable. While we’ve seen some significant paradigm altering industry changes from T-Mobile, what we haven’t seen is some indication of the firm’s plan for long term growth, as clearly it can’t be its UnCarrier revolution.

As E-Commerce Times writer Jeff Kagan notes, questions of transitioning away from such unsustainable promotions are high on the minds of T-Mobile’s parent company Deutsche Telekom as well, with executives of that firm going on record to question how long T-Mobile can operate in this manner.

Aside from unsustainability, Kagan also notes the possibility of market confusion with T-Mobile’s unending promotional onslaught. “T-Mobile has been rolling [new offerings] out so fast it keeps its customers’ heads spinning. Activity is good, but only to a point — it can create too much confusion, and that can slow growth. Is T-Mobile reaching that point?”

Simply put, T-Mobile needs to find a way to transition away from its promotional mindset towards a more stable, profitable business model. Now that doesn’t mean that the company needs to abandon its UnCarrier philosophy, but that perhaps it needs to start toning down the marketspeak and allow customers time to start making sense out of everything the company has thrown at them. As Kagan writes, “New thinking, new ideas, new products, and new waves are always great. However, too many new plans may begin to confuse the marketplace, and that is something T-Mobile should avoid.”

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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