T-Mobile (NYSE: TMUS) has started to offer a special promotion for upgrades of Apple’s (NASDAQ: AAPL) iPhone 6. The carrier may well pass Sprint (NYSE: S) to become the No. 3 wireless carrier in the U.S. However, among its primary struggles is to add and keep new customers, and hold current ones, when many pieces of research show it often has mediocre or worse customer service.
Several research firms do customer service rankings of the four large wireless carriers. Presumably, to make large gains against leaders Verizon (NYSE: VZ) and ATYT (NYSE: T) requires more than attractive deals on smartphones and what appear to be better fees for 4G service. If customers believe it has less than the best customer service, it will be hard for T-Mobile to keep the gains.
T-Mobile has an unimpressive score in the American Customer Satisfaction Index. It rates 70 out of 100, which is the industry average. The figure is the same as AT&T’s but below Verizon’s. In the J.D. Power Wireless Customer Care Performance Study, T-Mobile has the same rank as Verizon, but is behind AT&T. In the part of the Computer World survey which measured whether customers are “satisfied with the connection availability”, T-Mobile’s results rose substantially, but were still behind AT&T and Verizon. In the latest 24/7 Wall St. “Hall of Shame” report, T-Mobile was ranked in the worst ten among all companies across all sectors. AT&T had slightly worse grades, as did Verizon. But, sitting among the ten worst companies in a survey which measure customer satisfaction across 108 companies means its challenges to gain customers is substantial.
T-Mobile fairly makes the case that it has gained on the market leaders in most of these studies. However, up against the marketing fire power and retail distribution networks of Verizon and AT&T, it has to clearly win in these surveys to make the kind of advances T-Mobile management says it will make. And, in recent quarters it has made modest gains. The proof of whether its recent tactics have worked is how well T-Mobile holds these customers over the next year or two.
T-Mobile spends a good deal of its management time attacking Sprint. However, the real enemies are AT&T and Verizon and how consumers perceive them.
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