If you missed the news last week, T-Mobile is buying U.S. Cellular in a $4.4B deal that will mean more consolidation in the wireless telecommunications industry. As T-Mobile gains broader operations and a list of new assets, several implications will affect business customers, competition, and the overall market dynamics. What will this mean for clients on both sides, and more importantly what could it mean for future pricing? Here’s our market analysis, prediction for the future, and a few actions to consider.
Impact on U.S. Cellular Customers
For U.S. Cellular customers, the transition to T-Mobile ownership comes with a mix of potential benefits and drawbacks. Here are some key considerations.
Improved Coverage and Service Quality
One of the advantages for customers is the expanded coverage. T-Mobile’s extensive network means that business clients will likely experience better service quality and fewer dead zones, especially in rural and underserved areas. For frequent travelers, particularly those venturing beyond U.S. Cellular’s reach, the acquisition is a net positive. They will benefit from T-Mobile’s larger footprint.
Potential Cost Increases
On the flip side, the acquisition could lead to higher costs. T-Mobile has recently raised prices on some older plans, and with the reduction in competition, there’s a possibility of further price hikes. Customers who have enjoyed the unique pricing and service plans of U.S. Cellular might see these change as T-Mobile integrates the new assets.
Impact on T-Mobile Customers
For T-Mobile, the acquisition is a strategic win on multiple fronts, but business customers could also experience both pros and cons:
- Reduced Competition could Mean Higher Prices: The acquisition reduces the number of competitors in the wireless market. With fewer players and less competitive pressure, T-Mobile can leverage its market power to potentially increase plan costs and adjust service offerings.
- Expanded Coverage: The deal includes valuable spectrum assets that will enhance T-Mobile’s network capacity and coverage, ensuring better service quality and faster data speeds for all its customers.
- Increased Market Position: Business customers can be confident that their mobile partner has more staying power. By adopting larger operations, T-Mobile will significantly expand its customer base, boosting revenue but also strengthening its market position.
When the Market Shrinks, Here’s What You Should Do
The consolidation of T-Mobile and U.S. Cellular further narrows competition in the market, which can have broader implications for the industry and business customers.
Less Competition Means Price Monitoring & Comparison Becomes More Important
As the market shrinks, remaining carriers face less competition. This can lead to higher prices and fewer choices for clients. Historically, the competitive environment has driven innovation and kept prices in check, so a reduction could slow external pressures on T-Mobile.
- Corporate mobility leaders should prepare for price hikes and keep close eye on contract renewals
- Mobile rate optimization efforts and good ‘ole fashioned shopping around will be key to ensure you’re getting the best possible deal (keep reading to see how Tangoe does this better than carriers)
- Mobile usage data – analyzing how individual users consume services – should guide you in knowing how to reduce the rate you pay for mobile services and data plans
More Equivalent Offerings: It’s Time to Understand Your Premium Data
The dividing linesare already blurry in the wireless industry, and as competition decreases, the distinctiveness of each carrier’s offerings may continue to diminish.Carriers provide remarkably similar pricing and promotions – see image below. This trend may continue, with carriers focusing more on incremental service improvements and less on aggressive price competition.
Blurred lines make it more critical to have an intimate understanding of your mobile data usage and “premium data” allotments. Today, it’s far less about voice or SMS usage — in nearly all cases these services are included in the cost of the plan, making them a moot point. Instead, deals are defined by “premium data” or the amount of data you get that isn’t slowed or deprioritized. (See my other article on Net Neutrality and the impact on the telecom and mobile industries.) Evaluating these details can reveal significant savings and business continuity opportunities helping mobility leaders make more informed decisions when presented similar offerings like the ones displayed here. Otherwise, optimization efforts go only skin deep.
See how Tangoe’s mobile contract negotiators went to bat for a logistics company and saved them $1.4M.
Mobile Usage and Rate Optimization: HowTangoe Outperforms Carriers & Others
The typical problem is this: While carriers offer a one-time, macro-level optimization analysis, they don’t offer ongoing optimization at granular levels or validate savings once plans are implemented.
In contrast, Tangoe’s Advisory Services offer monthly mobile usage analysis and rate optimizations that dive into the details. We break down data usage behavior patterns and scrutinize existing plans to see how much “premium data” users get. In the end, Tangoe dissects your unique situation to match your defined needs against the smartest plan considering all available options. As a result, you get a data-driven approach to ensure each user is on the most cost effective plan.
For example, Tangoe’s mobile rate optimization service performs the following:
- Leverage data usage information to create an individualized needs profile for clients and their users
- Assess those profiles against preferred carriers and their wireless rate plans to identify ways to save (We do this usingour master catalog and market pricing index — intelligence gleaned from Tangoe’s database of $34B in tech spending)
- Provide optimization recommendations parsing out if its more cost-effective to transition to a different plan(s) and showing clients specifically how much they could save
To ensure accuracy, Tangoe uses a rolling 90-day period and historical data to avoid constantly modifying the same anomalies. Moreover, Tangoe provides ongoing services for clients, running monthly evaluations that analyze individual and pool optimization. This includes recommendations on rate plan types, migration, number of carriers, changes to terms and conditions, and other potential opportunities.
Explore More of Tangoe’s Mobile Cost Optimization Services
- Our mobile cost audit and rate optimization services go deep into your usage and costs providing money-saving recommendations
- Tangoe’s Mobile rates and savings analysis shows you how much you can save by switching providers – a great contract negotiation tool!
- Mobile contract negotiation services and RFP administration services deliver end-to-end support for procurement teams
Final Note: Changes Impact Everyone
T-Mobile’s acquisition of U.S. Cellular is a significant development in the industry, delivering both opportunities and challenges for business customers. While both U.S. Cellular and T-Mobile customers can look forward to enhanced coverage and possibly better service quality, they should also be prepared for potential cost increases.Mobility leaders should stay informed about changes and consider their options carefully.
Tangoe negotiates 400 mobile and telecom contracts annually. Let us help you manage your mobile plans and service rates. Get started today.
Want more money-saving tips for mobile services and plans? Check this out.
