I was doing an interview this morning with Smart Money magazine about AT&T’s purchase of T-Mobile, and wanted to elaborate a bit on my take here.
I believe that this acquisition has a lot to do with AT&T losing exclusivity on the iPhone.
For five years, AT&T was the only carrier to have the iPhone. This brought tens of millions of new customers. It was a massive competitive advantage. It was, quite possibly, the biggest competitive advantage in the history of big business.
Spotty service? Frustrated customers? What could people do? They couldn’t go anywhere else to get the iPhone.
But as soon as Verizon Wireless started carrying the iPhone, this advantage disappeared.
Not only that, the advantage turned into a huge liability overnight. This study found that 26 percent of AT&T iPhone customers were planning to leave for Verizon’s iPhone. That’s millions of customers.
AT&T needed to do something to regain its competitive advantage.
This acquisition of T-Mobile improves its network quickly and dramatically.
It’s interesting (AT&T became less interesting as soon as Verizon got the iPhone).
It’s good public relations (which AT&T has not had much of lately).
It offers hope of service improving to customers (and, perhaps, helps some of those 26 percent stick around a little longer).
And, for a huge price, it helps AT&T stay special in the eyes of the public. After all, Verizon isn’t in the news this morning, is it?
Let me say it differently: if AT&T didn’t lose exclusive rights to the iPhone, I don’t think this acquisition happens.
AT&T took a bold, aggressive step here to stay special in the consumer market.
What are you doing to stay special?