Verizon and T-Mobile executives on Thursday painted two very different pictures of unlimited, with one carrier casting the plans as asterisk-laden offers that can “wreak havoc” on the network and the other calling them the beginning of a “radical simplification” of an overcomplicated industry.
And I’d bet you can guess which carrier gave each answer.
Speaking an at investors’ conference on Thursday, Verizon CFO Fran Shammo held the line on unlimited, repeating Verizon’s stance that “the majority of people don’t need unlimited plans.”
Shammo criticized unlimited plans as bloated offers masked as simplification that come with “75 asterisks of what you don’t get.” Verizon was out to offer a better way with its revamped data tiers, which he said are simpler than unlimited and still meet customer needs.
“We’re giving more data and there’s no asterisk,” he said. “We believe it’s more customer friendly.”
According to Shammo, who is set to retire at the end of this year, unlimited plans also come with twin pitfalls: abusers and cash flow problems.
“The people who use unlimited plans can be abusive, they can really wreak havoc to your network,” he said. “And at the end of the day…I continue to say, you cannot make money in an unlimited video world. You just cannot do it, because you need the cash flow to keep up with your demand. And at some point that’s going to catch up to the people who talk about how great their networks are.
But T-Mobile COO Mike Sievert, who followed Shammo on the conference stage later in the day, wasn’t having it.
Sievert billed T-Mobile’s new single unlimited offering – T-Mobile ONE – as a “radical simplification” of the Un-carrier’s offer to consumers.
“This isn’t just rolling out a new offer…What we’re transitioning to is making our service a monthly subscription to the internet,” Sievert said. “There’s real opportunity for our business, not only for our brand but also for running our business from a cost standpoint.”
Rather than stoking customer confusion, Sievert said the new plan eliminates the need for customer questions about their bills – which could be reflected in a drop in calls to its customer care center. Currently, around a third of calls to its customer centers relate to billing questions, Sievert said.
“A third of our costs and our calls are about the bill,” Sievert said. “Well, what if there was no bill? What if there was no need for a bill, because everybody has one simple monthly subscription and they’ve gone ahead and put it on autopay? There’s massive opportunity for our customer satisfaction in that but also for our cost structure in how we serve them.”
T-Mobile CFO Braxton Carter, who was on stage with Sievert and CTO Neville Ray, said unlimited could prove to be a boon for T-Mobile’s business structure in particular by streamlining customer onboarding.
“What we’re really excited about is what Mike and his team are driving from a radical simplification standpoint of our value proposition,” Carter said. “Think about the onboarding experience in our retail fleet… If we can ultimately through what we’re doing and through other things that Mike is working on and has planned streamline and even cut just 50 percent off the onboarding time, think about what that does to our cost structure. Think about what that does to the calls into the call centers.”
Carter said T-Mobile expects to be able to scale those effects in selling, general and administrative expenses, which he said will accrete to margins in the future.
Despite Verizon’s resistance to unlimited, the T-Mobile executives were clear: The era of the data bucket is over.
“The idea that (data) ought to be metered out by the megabyte is so outdated…And I’m curious how long our competitors will stay on the wrong side of this long-term trend,” Sievert said. “If you have the right innovation, you can deliver it in a network efficient way in a completely unlimited service. While over at Verizon, I’m pretty sure they’re sticking with somewhere between ‘No’ and ‘Hell no’ on unlimited. I think it’s fantastic because the longer they’re on that side of history the better it is for our customers and our brand.”
And T-Mobile isn’t the only one pushing this message.
The comments echoed similar statements earlier this week from Sprint CEO Marcelo Claure, who said the carrier is aiming to “massively simplify” its business by moving to three rate plans. Those plans will include two unlimited options and an entry level plan, Claure said.