from the a-swift-kick-in-the-pants dept
While T-Mobile isn't without its faults (like its opposition to net neutrality, or the time its CEO mocked the EFF), there's little doubt that T-Mobile has been a good thing for the wireless industry. The company has managed to drag the industry kicking and screaming in an overall positive direction, including the elimination of the carrier-subsidized handset model, the elimination of annoying hidden fees, and the recent return to more popular unlimited data options. And its brash CEO John Legere, while sometimes teetering into absurd caricature, has at least managed to bring a sense of industry to a traditionally droll telecom sector.
And while T-Mobile had been mocking AT&T and Verizon's forays into video as "distractions," the company this week strongly hinted that it may bring a little bit of disruption to a sector that needs it most. Both Legere and T-Mobile COO Mike Sievert made numerous comments during their earnings call this week making it pretty obvious they wanted to test the market's reaction to the idea of some kind of T-Mobile video service:
"Talk about a poster child for an industry that has really kind of ignored customers and ignored customer cares and gouged at every corner,” Legere said of the pay-TV market during T-Mobile’s earnings call Tuesday. “Clearly, I salivate when I think about the possibilities of changing some of those (video) industries. And frankly, I’m fascinated with how little AT&T has done since they spent the mother lode buying DirecTV, and pretty much have let it sit on the side, and still be an old, crappy linear TV that they bundle weakly with their unlimited offer, so maybe more to come."
Subtle. Legere didn't get into specifics about how T-Mobile would enter the sector, but one possibility remains some kind of M&A with Dish Network, which has plenty of TV assets and a long-harbored desire to jump into the wireless sector (Dish has been not-so-quietly hoarding wireless spectrum for a long while). Like Legere, Sievert also spent more than a little time making fun of the cable sector, which continues to sport some of the lowest customer satisfaction ratings in any industry in America:
"The data on this is really clear. The cable industry is statistically one of the most unloved industries in the history of the consumer economy. So, obviously, it’s ripe for innovation in this area,” T-Mobile COO Mike Sievert said on the call. “I’ll tell you one thing, in 2017 we will reach the point where people have more screen time on mobile devices than on any other kind of screen, that’s really something incredible when it comes to watching their video. So we’ll see how this convergence unfolds, but in it we’re where the industry is going, not where it’s coming from, and we’ve got a brand that really resonates with people and possibly could resonate in an industry that’s even more maligned than we found ours four years ago when we got here."
A Dish M&A is one of the more palatable consolidation possibilities facing the telecom sector under what's expected to be a dramatically more M&A-friendly Trump administration. T-Mobile is also a rumored acquisition target for Comcast or Charter Communications, neither of which would be likely to continue T-Mobile's foray into price competition or disruption. Similarly, a Sprint acquisition of T-Mobile would reduce the number of overall wireless carriers in the space, reducing competition and potentially putting T-Mobile's disruptive run to an ignominious end.