[Jon3G]

Prepay fall for T-Mobile
Jun 2, 2005




T-Mobile made under 60,000 net new connections and lost a significant number of prepay customers during Q1 2005, as it turned its back on years of prepay handset subsidy.

Including its MVNO customers, the operator posted a net increase of 392,000 customers during Q1 2005, 311,000 of which were on prepay. Discounting customers from Virgin and Fresh, this shows an effective fall in the T-Mobile prepay user base of at least 28,000.

Taken together with as-yet-undisclosed figures from other MVNOs on the T-Mobile network, such as easyMobile, the fall in subscriber numbers is likely to be higher.

The network’s total customer base, which remains heavily reliant on prepay, falls to 10.63 million as opposed to 16.12 million when figures from Virgin and Fresh are included.

A T-Mobile spokeswoman said: ‘We are concentrating on a shift in distribution from prepay to contract and we’ve seen negative growth in prepay. The prepay market has been heavily competitive in the last six months, with new entrants moving into the marketplace.’

The figures puts some perspective on the network’s claim that 60% of its first-quarter sales were made through its direct channel, as this amounts to around 49,000 new connections during the period.
‘Prepay subsidy is dead and the funeral has to take place. We have a wholesale strategy which aggregates prepay customers in particular,’ said the spokesman.
See page 6 forVirgin’s results.



© Copyright 2005 : Noble House Media Ltd


http://www.mobiletoday.co.uk/artman-test/publish/article_431.shtml

[Hands0n]

"A T-Mobile spokeswoman said: ‘We are concentrating on a shift in distribution from prepay to contract and we’ve seen negative growth in prepay. The prepay market has been heavily competitive in the last six months, with new entrants moving into the marketplace.’"

I read that as "There is competition in the market and we will not rise to meet it" Can there be any surprise on their part then when the prepay customer goes elsewhere? Is there any logic to this attitude when their market "remains heavily reliant on prepay"? Have they moved into the business of giving their business away to their competition? IBM tried that approach yonks back and it did them no good!

It is all very well "concentrating" on converting prepay to contract - but that does rather smack of taking both eyes off of the ball, and the consequences of that could hurt T-Mobile, no matter how big they are today! It is the buying public who will decide on whether or not to go prepay or contract. And it is that [customer's] decision which will bouy up or sink T-Mobile's stated strategy.

[3g-g]

Possibly when you have 6 million Virgin customers *cough*, a few million of your own pre-pays, a bunch of Tesco pre-pays... what's that, 10/12 million people using your network, you just don't care what everyone else is doing?

[Hands0n]

It does, however, appear to be a rather arrogant strategy to take - I wonder if [IBM and others] history will repeat itself then to T-Mobile's cost. Agreed, with a vibrant MVNO operation perhaps T-Mobile really can afford to jettison their own prepay business. But in doing so they may well damage the T-Mobile brand. Image being everything in business I question the wisdom of doing that. But they must know what they're doing. Right? :rolleyes:

[3GScottishUser]

There might be something in T-Mobile's strategy of being a network provider and wholesaler of services. Think how BT sell broadband now and their (regulator enforced) retail/wholesale approach seems to mirror that of T-Mobile. With the market saturated it could be that the wholesale business might not be a bad place to be with no marketing, customer service or aquisition costs to bear. Think about it - T-Mobile have now been copied by 02 and now Vodafone offering MVNO services...

[Hands0n]

If that is where they are heading then that is probably a sound strategy - I suppose they could even be a MVNO supplier to their "Retail" arm if they divisionalised (always assuming they did not really want to get out of the business).

[3g-g]

So why aren't all the networks cashing in? T-Mob definately has the biggest base of MVNO customers, and the others are following in dribs and drabs. But if there's money to be made, as is predicted, why isn't every network offering a MVNO to anyone that asks? What are they worried about? There's always going to be millions of users using "the original" operators networks, bringing them revenue. I wanna see; McDonalds MVNO, SKY MVNO, Pizza Hut MVNO.. Talk3G MVNO.., ;)

[henry]

Possibly when you have 6 million Virgin customers *cough*, a few million of your own pre-pays, a bunch of Tesco pre-pays... what's that, 10/12 million people using your network, you just don't care what everyone else is doing?

Surely Tesco Mobile is a joint O2/Tesco operation and nothing to do with T Mobile.

[Ben]

Yeah, I think we've told him that before, but he's spent far too long up mobile masts for his brain to function properly! ;)

Welcome to Talk3G.co.uk henry! :)