- Fierce caught up with COO Jon Freier and Chief Commercial Officer André Almeida at the T-Mix event last week
- Citing T-Mobile’s strengths, they're "heads down" on competing with their current rivals
- Analyst Roger Entner says Elon Musk’s foray into wireless isn’t likely to kill the established mobile phone companies – but rural telcos should be worried
Last week, T-Mobile staged an event in Los Angeles for the launch of its T-Mix plan. The day prior, Qualcomm announced that SpaceX will be using Qualcomm’s cellular infrastructure platforms for its nationwide terrestrial 5G network.
Talk about timing. While Fierce was there (on T-Mobile’s dime), we asked a couple T-Mobile executives for their take on SpaceX’s plans for Starlink Mobile.
No surprises here. T-Mobile COO Jon Freier said what many industry insiders are likely thinking: No one knows exactly what Elon Musk is up to. SpaceX’s strategy for Starlink Mobile seems to change by the day – or at least, week to week.
“What I do know, though, is that we’ve got to compete vigorously for the customers that we have to continue to retain them and serve them better than anybody else,” he said. “Whatever they do – I don't know what they're going to do – but we're heads down on driving this business with or without them.”
Freier has been in the wireless business for 32 years and he said this is the most competitive time he’s seen in the industry.
“Regardless if they’re here or not, I’ve got to be on the game today. Verizon’s swinging the bat. AT&T’s swinging the bat,” he said. “Cable’s doing their thing … I don’t know what will happen in the future, but I feel the pressure to compete today.”
In a separate interview, T-Mobile Chief Commercial Officer André Almeida had a similar response.
So far, SpaceX’s entry into wireless has consisted of various strategies. Earlier this year, it stressed the power of its satellites.
T-Mobile has been using satellites in its network for two years now – thanks in large part to its direct-to-device (D2D) partnership with Starlink. “We know exactly what you can do and what you can’t do with that technology. That technology is a complementary technology. It’s for very low-density areas, and it won’t go beyond that,” Almeida said.
Next came a femtocell kind of strategy, followed by a pledge to build a terrestrial network alongside the satellites – potentially tapping 80,000 cell sites across the U.S.
“If they build a network, they build a network,” he said. “We are focused as a company on the things we control and on the things that make us successful.”
T-Mobile has something else going for it: the fact it was a scrappy upstart with the worst network in the country. Now it boasts awards from third parties declaring its mobile network as the best.
“We are going to continue to have the best network in America and we’re going to guard this zealously in 5G and then in 6G,” he said. Plus, “value is extremely important to customers. With T-Mix, what we’re doing is letting customers choose how they want to express what value is to them. Whatever comes – SpaceX, a new entrant, different strategies from AT&T and Verizon or cable – this is what prepares us for the future.”
DT CEO: Musk is “new kind of player”
T-Mobile’s majority owner is Germany’s Deutsche Telekom (DT), whose main source of income is its U.S. business. DT CEO Timotheus Höttges spoke about SpaceX’s push into the mobile business during his company’s earnings call on Thursday.
He said a new kind of player is coming to the ecosystem. “He [Musk] has chipsets, he has data centers. He has AI. He has satellites. He wants to go for mobile services, and he goes for handsets. He will go as well for maybe integrating social media or at least agent models into his service,” he said.
“He is creating a new way of communication services … Therefore, we have now to find the right answer about this maybe over the next five to 10 years, a new kind of business he's going to create with a vertical integration,” Höttges said. “That is why I'm saying I take that super serious because I was witnessing what happened to the car industry. They were ignoring it for too long, and we have to face the situation. But it's not a free lunch. And you see that with Tesla as well in the car industry.”
Analyst: Lots of irrational fear
Back in Los Angeles, analyst Roger Entner, founder of Recon Analytics, said there’s a lot of irrational fear hovering over the wireless industry. “Elon is the boogeyman,” he said.
In reality, Musk’s strength lies in rural areas, which are hard to cover economically with traditional wireless infrastructure but a no-brainer for satellites. In urban America, it’s a different story. “The thing is just stacked against him,” Entner said.
Citing Recon Analytics survey data, Entner said the No. 1 segment interested in signing up for a converged broadband and mobile service from Musk is comprised of white male Tesla drivers. “They love the man,” he said.
Zooming out, his firm figures Musk’s empire will probably end up with somewhere in the neighborhood of 20 million subscribers, possibly in five years. “This hurts, but it’s not going to kill anybody,” except for small rural telcos.
It’s similar to what Walmart did many years ago when it built stores in towns across the country – the small Mom & Pop shops felt it the most and ended up shutting their doors.
Can Musk build a better cell phone service than anybody else?
“Better” is a difficult thing to measure, he said. “It depends for who.” For a farmer in rural America, “yes, because nobody’s covering the fields,” he said. However, in urban areas – that’s where it will be more challenging.
But he also added this: “I don't think Elon gets up in the morning and dreams about dominating the telecom industry. It's a connective piece that he needs for his bigger vision.”
Read more stories about T-Mobile on Fierce Network:
T-Mobile CTO welcomes competition from SpaceX
T-Mobile picks crazy week to launch T-Mix
SpaceX’s nationwide terrestrial 5G plans get real as Qualcomm signs on
Do SpaceX’s ‘missing pieces’ carry a Dish logo on them?
SpaceX might sign deals for 80,000 towers to build mobile network, or is it bluffing?