The announcement that AT&T will buy T-Mobile for $39 billion ends 10 years of Deutsche Telekon’s sortie into the United States. T-Mobile generated respectable sales, but ultimately it wasn’t clever competitive advertising or creative call & data plans that undermined their efforts. In large part it was the hardware, specifically the iPhone that did them in.
Once the touch screen iPhone went on sale, T-Mobile’s customer churn – the industry’s term for disloyalty and defection – dialed up to more than twice the rate of AT&T and Verizon Wireless, their most profitable contract customers moving to their competitors. Because no matter how providers talked about their network, it turned out the hardware carriers were able to offer, the phones, made a very significant contribution to customer engagement and loyalty. And without access to the iPhone, T-Mobile were in an untenable competitive position.
Since a smartphone plays such a large part in how consumers view, compare, and choose wireless options, we thought it would be interesting to see how smartphone brands rank on the 2011 Customer Loyalty Engagement Index:
Someone once said that a “smartphone” is just a cellphone that’s gotten smug! You’ll have your own opinion about that, of course, but it’s interesting to note that in the Smartphone Category, the wireless network attribute, makes a much, much smaller contribution than the equipment a carrier can offer customers does in the Wireless Category.
And it may be that when you are the world’s leading smartphone and #1 in loyalty you have a right to feel a little smug.