Sometimes, there are companies that face competitive pressures and double down on what they’re doing. Sometimes it works, more often it doesn’t. Sometimes, though, a company will face true pressure and respond by inventing a new way of doing business. Instead of insisting that nothing is wrong, or that it can grow simply by ‘working smarter’ (or whatever the current cliché is), management has the courage to see the opportunity for change.
So it is with T-Mobile. The company is responding to the pressures its been facing by reinventing itself. Faced with a reputation as a lower quality network, and losing subscribers because of it, the firm is making changes.
No subscription plans
No phone discounts
Adding the iPhone
Did I mention the no subscription plan?
Essentially, T-Mobile is using its upcoming merger with MetroPCS Communications Inc (NYSE:PCS) to bootstrap itself into the growing pay-as-you-go mobile phone market. That’s a potential subscriber base that has been growing quite a bit lately and has real potential. The thing most people hate about mobile phones is being locked into a plan and getting poor customer service because of it. After all, where are you going to go? The providers have you locked in, right? Heck, these are the companies that didn’t want to allow people to port their phone numbers so people would be forced to suffer great inconvenience if they ever moved on.
T-Mobile is blowing all that up and enhancing its smartphone provisions, too. After losing a great many subscribers recently, the addition of the cool factor from Apple Inc. (NASDAQ:AAPL)’s iPhone can’t be overstated. Sure, lots of other systems now sell iPhones, but T-Mobile is the one that can provide it without locking you down. This allows the company to provide the cool factor of the Apple Inc. (NASDAQ:AAPL) iPhone and combine it with the freedom of choice that it’s really selling.
The company also provides solutions that use Google Inc (NASDAQ:GOOG)’s Android system. So, other major players can no longer use phone availability as a reason to choose them over T-Mobile. In addition, the openness of Google’s system allows the company to draw a strong parallel with its new direction. There’s a case to be made that the more tech-oriented partisans of open-source computing could line up behind T-Mobile’s new initiative.
Essentially, T-Mobile is trying to redefine itself (and MetroPCS) as the company that listens to and provides what the client wants – not what it wants, if you understand that difference. It’s yet to be seen how well the company can pull it off, but a major player making this move can be a game changer for the industry.
God knows I hope it is.
Still, it might just be that the biggest advantage that T-Mobile can have is the resistance that will be shown by its two biggest competitors. AT&T Inc. (NYSE:T), in particular, has always struck me as liking the way things are at the moment and, therefore, will be most resistant to altering the way it does business. That could mean good things for T-Mobile as people drift away from AT&T toward a provider that’s more responsive, not just to their needs, but to their desires.
It’ll be interesting, in any event. There’s no greater opportunity for an investor than when a true sea change is underway, and this has the potential to be one. If you, as an investor, agree with that, then it’s time to move. You can’t invest in T-Mobile (though there are PINK sheets out there for its parent, Deutshe Telekom), but you can make sure you’re not involved with companies who are not reacting properly to the changes that T-Mobile is trying to bring about. That should be your focus here.
The article T-Mobile, Apple Inc. (NASDAQ:AAPL) and Changing the Smartphone Game originally appeared on Fool.com.
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Related tickers: Apple Inc. (NASDAQ:AAPL), Verizon Communications Inc (NYSE:VZ), AT&T Inc. (NYSE:T), Google Inc (NASDAQ:GOOG), MetroPCS Communications Inc (NYSE:PCS)
