T-Mobile’s Katz: Enterprises still don’t know about us

One of the big opportunities for T-Mobile sounds like a bit of a bummer: Enterprises aren’t aware that’s it’s even an option when it comes to meeting their wireless business needs.  

“Enterprises still don’t know that we compete in this category,” said T-Mobile Business Group President Mike Katz during a Morgan Stanley investor conference on Wednesday. “We’ve got the lowest awareness that we are a competitor for enterprises.”

While that sounds bad for business, it actually represents a great deal of upside for the operator: A lot more growth to tap into. In fact, it intends to double its market share, from 10% to 20%, in coming years.  

Of course, the “un-carrier” has focused its efforts over the last 18 months to raise awareness, and it’s made inroads in making sure people know it’s an option beside Verizon and AT&T. “But we’ve still got work to do,” he said.

Earlier this year, Katz said the “old carriers” were using their 91% market share to feed business and government customers a diet of old technologies, old plans and hidden fees. This week, Katz said one of the things that T-Mobile offers – besides the allure of 5G – is simplicity.

International roaming is one example, where services like unlimited data and unlimited voice are inclusive in T-Mobile’s plan, he said. Believe it or not, even unlimited voice and data often are not included in a lot of the incumbents’ plans, he added.

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One of the things about enterprises and government agencies is they tend to buy on network performance first. So when you’re selling to an enterprise, they don’t take anyone’s word for it – they put carriers through their paces and a rigorous testing process before they commit.

“We’re coming out on top,” of those tests more and more, and in the 5G era, “we’re coming out on top the majority of the time,” Katz said.

Another thing about government and enterprises is they have extraordinarily long purchase cycles compared with consumers, buying maybe once every five years or even once every 10 years in some cases.

When they’re making a decision, they want to make sure they’re picking a contemporary technology and one that has durability, and in the 5G era, there’s only one clear leader, and “that’s us,” Katz said.

In the broadband category, T-Mobile offers a home office internet product that helps facilitate work-from-home and hybrid scenarios, for which it’s seeing high demand, he said.

In the small business space, it’s also seen “great response” because like consumers, small businesses have very little choice in broadband plans, and that reduced choice results in big fees for the business. “We’ve seen our value proposition resonate with small businesses really well,” he said.

The IoT category is another one where companies have long-term needs. Many times, their IoT devices will be in the field for five years or a decade, so the customer needs solutions that will last.

In the automotive space – one that has been dominated by AT&T – T-Mobile is seeing good momentum and in the last year announced partnerships with VW and Diamler. More are coming, he indicated. 

T-Mobile as sole provider?

In terms of the types of partnerships it’s doing, that’s starting to change, putting T-Mobile in the position where it’s either in the primary or co-primary position for the enterprise. It’s not typical for an enterprise to pick one provider – they usually have some redundancy, but “we have a big enterprise announcement” coming shortly where the enterprise has decided to use T-Mobile exclusively, Katz said. “We’re seeing more of that behavior.”

Because of all that, the goal in the five-year horizon is to double its market share, from 10% to 20%. “I feel like we’ve made really good progress towards that and I have high confidence that we will achieve that,” with the potential for upside within that time period.

The fact that T-Mobile’s 5G Standalone (SA) traffic doesn’t have to run through a 4G LTE network means an enterprise gets access to a higher performing, lower-latency network. It also has access to a lot of data centers, which means it can process closer to customers’ applications, “probably on average better than anyone else,” he said.

He reiterated that T-Mobile has a number of trials underway with enterprise and government, both in Mobile Edge Compute (MEC) and private networks, and these are big customers, including 12 of the Fortune 50, he said.

Its partnership with Lumen includes work with 5G and MEC, including in the areas of logistics and transportation. It also worked with Lumen on a fixed wireless access (FWA) service for a government contract and they’re starting to bid jointly together on those opportunities. In the third quarter, they successfully bid for a USPS contract that’s focused on strengthening and modernizing its network in over 32,000 post office locations.

Earlier in the week, T-Mobile made hay of the fact that it reached the 200 million population milestone with its 2.5 GHz 5G network coverage. That covers about 80% of T-Mobile’s customer base and it’s in addition to the 308 million people it covers with its 600 MHz Extended Range 5G service, noted T-Mobile CFO Peter Osvaldik.