4 Ways Verizon Can Benefit From an AT&T/T-Mobile Deal
The recently announced acquisition of T-Mobile USA by AT&T, if approved, potentially vaults the second and fourth place wireless carriers into first place, with their combined subscribers tallying more than Verizon’s total subscriber number. Verizon will spend a lot to convince the government that a combined AT&T/ T-Mobile is bad for consumers and to ensure closing that deal will be no small distraction for its two competitors.
T-Mobile can’t exhale in relief just yet, as the agreement, including the billion dollar fees they’ll likely get if the deal does not go through, could be challenged in court by everyone from Nokia to Google to Comcast to Apple.
Surely, there will be a lot of time, money and effort spent on selling this deal in to the federal government, generating a lot of work for PR agencies, lobbyists, hardware vendors and consumer advocates. While AT&T and T-Mobile fight the battle on Capitol Hill, Verizon could be claiming victory on the front lines with consumers.
Here are 4 ways Verizon might capitalize on the announcement:
- Stay on message: Verizon’s clarity of message—it's about the network—has clearly positioned them as the most reliable consumer choice. Both AT&T and T-Mobile have suffered from the strength of Verizon’s network message in light of their own network evolution challenges (not the least of which were T-Mobile’s late arrival with 3G and AT&T’s call handling problems with the iPhone.) Staying the course with their current, well established network position will continue to serve Verizon well.
- Comfort confused consumers: If consumers aren’t sure who’ll own their contract two years from now, they may be loathe to sign a new agreement with T-Mobile. In addition, T-Mobile’s television commercials have specifically poked fun at AT&T’s network. A well-positioned message by Verizon could capitalize on customer’s sense of confusion or betrayal.
- Be the anti-corporate brand: Verizon has focused heavily on consumer messaging, and with its successful launch of the Envy, Chocolate and Droid brands, has shown it can build and maintain a franchise line-up of consumer focused devices. (Okay so I’m choosing to forget about the Kin because it was practically stillborn.) AT&T built a strong enterprise customer base, not just through the sale of a large portfolio of smartphone devices early in the category’s development, but also through volume pricing deals for corporate buyers. T-Mobile has a heavy consumer and Android base, and a very strong family focus, especially with its MyTouch and Sidekick brands. Verizon should continue to focus on super-messaging phones that appeal to the young and social, 'Gen C' customers, who are always connected and communicating.
- Deliver service innovation: In today’s economy, it’s typical for an industry with few providers (like the airline industry, for instance) to provide much less service for more money than a few years ago. As sales automation and cloud services technology begin to drive down operational costs, Verizon can seize the opportunity to support customers in new and efficient ways, like bundling FiOS home broadband services, or packaging Gogo Inflight wireless data services on your iPad, or securely enabling physical purchases through a personal cell phone account as if it were a credit card. Given all the infrastructure and systems work AT&T and T-Mobile will be pre-occupied with to support the acquisition, Verizon, and its customers may be best served by a focus on service innovation.