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T-Mobile’s plan to tear down the Verizon/AT&T duopoly brick by brick

March 18th, 2015 at 2:09 PM
T-Mobile Uncarrier 9 Small Businesses

T-Mobile has spent the last couple of years laying siege to AT&T and Verizon’s hold on the wireless industry and the results speak for themselves. Since 2012, T-Mobile has gone from having 33 million wireless customers to having 55 million wireless customers. Even more importantly, it’s blazed a trail of new initiatives such as early smartphone upgrade options and rollover data plans that competitors have quickly scrambled to emulate. On Wednesday, T-Mobile revealed its ambitious plan to beat Verizon and AT&T in the business world with a new program targeted right at small business users.

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First, the basics of T-Mobile’s pricing structure: Small businesses can get 10 lines for $160 per month, or $16 per line. For anything over 10 lines, the price drops to $15 per line, so you can get 100 lines for $1,500 per month. When you hit 1,000 lines, the price drops to $10 per line or $10,000 per month. Each line comes with unlimited talk and text and offers 1GB of data per line. Customers can add more data to the mix either by buying a pool for all their users to use or by allotting more data to individual users who have particularly high data needs.

Beyond these basics, what makes this a really smart move for T-Mobile is that it’s yet another way the “Un-carrier” is attacking its bigger rivals from the side instead of head on.

As Sun Tzu once correctly wrote in The Art of War, the worst war strategy is to lay siege to an enemy’s walled cities. AT&T and Verizon’s hold on the large enterprise market are their walled cities. Attacking them would mean wasting countless resources in an effort that would drain T-Mobile’s strength at the expense of other, more lucrative opportunities.

This is why T-Mobile’s initial advertisement showing a small businessman being shunned by a big wireless carrier because he “only” wants to buy 12 lines was so clever: T-Mobile knows the bigger carriers are laser-focused on maintaining their accounts with big businesses and can often leave small businesses feeling like second-class citizens.

“T-Mobile’s first business effort with Un-Carrier is a logical next step in its strategy, since businesses have many of the same pain points as consumers,” writes analyst Jan Dawson. “T-Mobile’s move towards transparency in pricing should help customers on other carriers figure out more easily whether it’s worth making the switch. It doesn’t enable true comparison shopping because the other carriers still do custom, negotiated pricing for business customers. But with most business customers currently on other carriers, that may not be so important.

If T-Mobile can succeed in driving a wedge between small business customers and AT&T and Verizon, it will be yet another way the “Un-carrier” has changed the rules of the wireless market.

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