Verizon Wireless Needs To Act Like The Market Leader
Apple’s view on carriers is simple: they are the dumb pipes that are merely providers of the connection that allows us to do what we want on our smartphones. Over a decade later, some carriers are still trying to prove that they are more than this by offering features and benefits that the other guys don’t have. In America, we’ve seen T-Mobile bundling Netflix with its family plans, a move followed by AT&T bundling a HBO subscription. Verizon’s Chief Executive Officer, Lowell McAdam, has been in the press explaining America’s number one carrier’s take on things – specifically on carriers offering freebies. The long and short of it is that McAdam reckons having to give something away to encourage customers to join the network is missing the point of what customers need. Topically, in an interview with America’s CNBC network, McAdam explained that Verizon’s network only lost two percent in Houston when Hurricane Harvey struck Texas, compared with unnamed competitor networks losing seventy five percent of coverage. This unverified statistic is very interesting, but let’s not forget that there are lies, damn lies, and statistics!
Interestingly, when T-Mobile started bundling Netflix at the end of summer 2017, their notes to analysts explained that they did not believe this offer would drive up sales but instead it would help keep customers with the carrier. McAdam’s comments that customers remember their experience with carriers and coverage is certainly true, but customers tend to remember a bad experience for a lot longer than a good experience. For many customers, a good experience from their carrier or cellular network is that it works and there are no nasty surprises in the bill – having access to HBO or Netflix only sweetens the deal. If my carrier reliably and consistently works through thick and thin I will be happy and will stay, but I’d be prepared to cut some slack if a category four hurricane made landfall the next town over. I do not expect three quarters of customers on competitor carriers to switch provider. Over time I would take the network reliability for granted and start to question how much I’m paying a month – especially when a competitor has invested billions into its own network but would charge me considerably less.
One problem I have with McAdam’s statement is that Verizon has reversed its course many times in the last two years alone. Yes, it’s the biggest carrier by subscriber numbers but it doesn’t lead the industry. At one time, Verizon repeatedly told customers (and the industry) that they really didn’t need unlimited data plans. Customers don’t like it when a company tells them what they need and vote with their feet! Earlier in 2017, Verizon started offering unlimited data plans again because of competitive pressure from T-Mobile. T-Mobile aren’t the perfect carrier by any stretch, but their have a good story: unlimited data, no hidden charges, and in 2017, much better coverage.
McAdam’s recent remarks that Verizon doesn’t need to sell on a media service to customers ignores Go90 and the $8.9 billion spent on a combination of AOL and Yahoo. Go90, AOL and Yahoo are attempts to get customers to use more metered data on their Verizon plans. Depending on where you look, T-Mobile and Verizon’s network are going toe-to-toe across much of America. In some areas, Verizon is outperforming and in others, T-Mobile is outperforming. T-Mobile has invested a massive amount into its network, and of course Verizon has too – but I can’t help wonder how many more cell towers Verizon could have bought with that $9 billion of so, rather than two faded digital media businesses.
Cutting through the noise about network reliability and media companies, Verizon is the largest American carrier by subscriber numbers. It’s the biggest, it’s the number one – so it needs to start acting like it.
SOURCE [Android Authority]