T-Mobile charges full throttle with 5G
T-Mobile has spent the last month making significant changes to its business starting, with the distribution agreement with nationwide retailers Best Buy and Walmart. This was followed by a new partnership announced with Google, offering customers discounted access to YouTube TV and highlighting T-Mobile’s commitment to Google hardware (the Pixel phones). And finally last week, T-Mobile announced its latest Uncarrier program, pulling a rabbit out of the hat with its unexpected 5G phone upgrade program. The carrier announced that all T-Mobile customers, existing and new, will be able to upgrade to a new 5G smartphone, Samsung’s newly announced Galaxy A32 5G, if they trade in an old phone in working condition. iPhone users, who are very unlikely to be lured by a free Android 5G phone promotion, are offered a similar deal where those who trade in an iPhone 11 will receive a free upgrade to a 5G-powered iPhone 12. Customers who trade in an older iPhone (anything from an iPhone 7 to 10) will receive a half-off discount on the new iPhone 12 models. Notably, the carrier is also upgrading all customers (new and existing), who are on limited data bucket plans to its new unlimited 5G data plans as part of the 5G phone upgrade program.
The new Uncarrier program also includes T-Mobile’s long-awaited Fixed Wireless Access service on its new 5G networks. The carrier has been trialing the service on its 4G LTE network, and the 5G-powered service is now commercially launched for almost 30 million households across the US. The new service requires a 4G/5G gateway (shipped by the carrier) and costs $60/month for unlimited access including the modem leasing costs. T-Mobile claims that customers will enjoy average speeds of 100 Mbps if they are in the 5G service coverage zone.
The NPD Take:
- 2020 had been a tough year for mobile phone sales as consumers held on to their old smartphones due to the pandemic limiting their mobility. T-Mobile’s new program should help accelerate device upgrade cycles and possibly give T-Mobile the lead in 5G device installed base in the market.
- T-Mobile’s new subsidy program looks more balanced compared to AT&T’s “all-in” subsidy program that was extended to its existing user base for new iPhone upgrades and adversely impacted its bottom line in Q4 2020. AT&T’s move was more defensive as it wanted to retain its base, while T-Mobile is aiming to move its base over to its new 5G network, which is more cost-effective and it will help boost its network quality image among subscribers.
- T-Mobile’s new Fixed Wireless Access broadband service will help the carrier reach out to the broadband-less rural communities and further grow its base. The carrier’s new distribution partnership with Walmart will be key in the marketing of this alternative broadband service in rural communities.
Nokia: The hybrid OEM/carrier
HMD Mobile, the owner of the Nokia brand, last week showcased its new mobile phone series targeting multiple segments in the market. The OEM launched a total of six new models; the low-end C10 and C20, the mid-tier G10 and G20, and the “flagship” X10 and X20. We call the latter two “flagship” because of their positioning within Nokia’s lineup but it should be noted that the top of the line X20 is more of a lower mid-tier phone by US standards, as it is powered by Qualcomm’s entry-level 5G silicon (Snapdragon 480) and carries a 349 Euro (about $415) price tag. The real highlight of HMD’s event, however, was the OEM’s announcement that it is entering the crowded MVNO service place in the U.K. The new HMD Mobile MVNO will offer service plans starting at £6.50/month including UK/EU calls, texts, and 1GB of cellular data each month. HMD announced that it plans to gradually expand the MVNO to other countries over time.
The NPD Take:
- HMD did not provide any details about the upcoming US availability of these new models, but it will not be surprising to see a couple of these products sailing across the Atlantic and hit US carrier shelves considering LG’s departure and carriers’ desire in finding substitutes. Despite the void between 2011 and 2019 in the US market, Nokia still has a substantially high brand awareness rate among consumers and can help carriers partially fill the gap left by LG’s departure.
- The HMD Mobile MVNO initiative should help the company get its name out there as it’s been heavily overshadowed by the Nokia brand. HMD owns the rights to the Nokia brand until 2026. The MVNO can also help HMD sell more Nokia phones if it can attract switchers from other carriers. On the other hand, HMD’s MVNO push may very well alienate its carrier MVNO customers who sell Nokia phones in the market.