T-Mobile hits 50% with Flext

[Ben]

T-Mobile's Flext is starting to cause them headaches as they fumble to stem the flow of new connections...

http://www.mobiletoday.co.uk/artman-...cle_1427.shtml

T-Mobile is to slow down its aggressive bid for market share amid concerns of Flext sales overheating.

‘[We are] taking about 48% of new sales,’ T-Mobile sales director Simon Ainslie (pictured) told Mobile. ‘We’ve been very successful and very aggressive, but that’s an unsustainable share in the long run.’

The runaway success of its deals has forced T-Mobile to try and cool down sales, following severe handset and Sim card shortages and reports of customers having to wait days for handsets to be connected. The operator aims to stabilise its share of acquisitions at around twice the volume it took before the launch of Flext.

This month, T-Mobile has cut commissions on Flext by around £15 per box and its Business 1-Plan deals by around 20%. The network has also declined a request from The Carphone Warehouse to plough more money into commissions in return for higher volumes. ‘There’s the opportunity to do big things with Carphone, but they can be very aggressive on the amount of money they want for doing it,’ Ainslie said.

Last month’s decision by the big three multiples to cut cashback deals on Flext has had an immediate impact on sales; Flext 35 was replaced by 3’s Video & Talk & Text 1100 at the top of this week’s Mobile tariff Tracker.
Ainslie said the network was keen to see less subsidy going into its deals. ‘It got to the point where people were more or less handing out cash. It just felt silly,’ he said. ‘April is definitely when the market started to come to its senses.’

Dealers Mobile spoke to said that they agreed with T-Mobile’s decision to
cut commissions. ‘They don’t need to put that much money in the deals. They do well without it, and the packages are still decent enough for us to make money,’ said one independent dealer.

[Hands0n]

Good grief! I guess they didn't expect their new baby to sell so well? Why on Earth bother then?

‘We’ve been very successful and very aggressive, but that’s an unsustainable share in the long run.’

WTF Hang on, let me see if I've got this entirely right. "We've made a huge success out of our new tariff but we really don't think that we want such a huge share of the marketplace going forward"

The operator aims to stabilise its share of acquisitions at around twice the volume it took before the launch of Flext.

More WTFs!! If that were me I'd want all of the market, not a piddling doubling of my previous volume! Golden geese are there to be exploited, it won't last that long. If they're not careful they'll get their wish! Flext will be bettered, in due course to be sure.

What next on the monthly board meeting agenda? "How to fail at something new", or "Market leader, who needs it?".

Perhaps they should have, instead, simply ramped up [temp] staff, hardware and software resources in anticipation of wiping the floor with the opposition.

Gawd, its enough to drive a person to cynicism

[3GScottishUser]

Looks like 3 UK have reacted with 50% extra talk & texts on selected on-line deals. This move is guaranteed to make them few friends in terms of dealers who they are now undercutting substantially.

3 offer a free handset and 300 mins + 150 texts for £25 a month.

T-Mobile offer a free handset and 300 mins + 500 texts for £25 a month on Flext (On-Line promotion)

So it looks like T-Mobile still have the edge and once you go beyond the £30 Flext deal (all Flext on-line now include 500 SMS) there is nothing in the market that comes close.

Then there is the Web N Walk add-on...... another compelling reason.

This seems straightforward enough. If T-Mobile continue to take half of all new business in the country, pretty soon they will creak and then collapse under the weight.

I think it's fair to assume that all five networks have done their capacity planning based on certain assumptions about market share. Sure, T-Mobile want to expand their business - clearly, given how aggressive they've been over the last couple of months. But they don't want to expand it so quickly that their network and support infrastructure simply can't handle the numbers. New masts don't go up overnight, and call centres don't train themselves.

So, they continue to offer their very attractive new products, but they push them a bit less zealously. They slow their rate of growth to something a bit more manageable, to give themselves a chance to keep up. Manageable growth. We shouldn't be slagging them off as incompetent, we should be respecting a business decision that may hurt their bottom line a bit but will help to maintain a reasonable level of service for their customers.

Also, a correction: the 500 free text promotional bundle is not offered for the Flext tariffs, only Relax and Off-peak. Personally, I'm glad this is the case. It would be sheer stupidity to offer a bonus text bundle with Flext - the entire point of the tariff is the fungibility of voice minutes, SMS and MMS.

[Ben]

Originally Posted by auturge

Also, a correction: the 500 free text promotional bundle is not offered for the Flext tariffs, only Relax and Off-peak. Personally, I'm glad this is the case. It would be sheer stupidity to offer a bonus text bundle with Flext - the entire point of the tariff is the fungibility of voice minutes, SMS and MMS.

I agree completely.

[Hands0n]

Originally Posted by auturge

This seems straightforward enough. If T-Mobile continue to take half of all new business in the country, pretty soon they will creak and then collapse under the weight.

I think it's fair to assume that all five networks have done their capacity planning based on certain assumptions about market share. Sure, T-Mobile want to expand their business - clearly, given how aggressive they've been over the last couple of months. But they don't want to expand it so quickly that their network and support infrastructure simply can't handle the numbers. New masts don't go up overnight, and call centres don't train themselves.

So, they continue to offer their very attractive new products, but they push them a bit less zealously. They slow their rate of growth to something a bit more manageable, to give themselves a chance to keep up. Manageable growth. We shouldn't be slagging them off as incompetent, we should be respecting a business decision that may hurt their bottom line a bit but will help to maintain a reasonable level of service for their customers.

Hi there and welcome to Talk3G.

Last point first - I hope not to appear to be "slagging them off" but merely offering healthy critique. I would like to think that if I were the MD of T-Mobile (or any of the others for that matter) I would want to grab as big a market share as possible. In a dog-eat-dog world that is entirely reasonable to strive for, I believe.

Of course I totally agree with your comments about overloading the network and the business, it is all too easy to do if not managed appropriately. It may well be that T-Mobile underestimated how successful Flext would be. Perhaps they do not have the Customer perspective truly sussed out (do any of them?). Flext had to work, if for no other reason its sheer transparency and flexibility have a very strong appeal. Even if they did not have sufficient 3G masts, Flext is not allied to one specific transmission technology.

But look at what caused them the problem (as cited by the article), that being a shortage of Handsets and SIMs. Lets say they bought in a huge load in anticipation of Flext's success ...... even if it didn't they would go in the normal course of business. It would only mean they would have to hold a bit of inventory - an abhorrence in modern day accounting practise - rather than rely on JIT procurement.

Their problems with connecting new customers will have been harder to remedy, if it was a human resource problem.

T-Mobile deserve all the success with the innovative Flext and also with what they are doing with data in Web N Walk. These are both extraordinary initiatives and are clearly bound to generate a lot of new business. T-Mobile should, I believe, be going into this with an aggressive focus and [better] anticipate the tidal wave of interest it generates. And to be fair to them, they have broken some new ground here, so well done T-Mobile.

There, a less cynical repost