T-Mobile tariff overhaul signals change

T-Mobile tariff overhaul signals change
A radical overhaul in T-Mobile price plans has marked a step change in the operator's approach to the market.

The operator replaced two of its most recognised tariffs - Combi and Flext - with a new set on 1 February.

The move aligns the network with its handset strategy and further fuels speculation that T-Mobile may reposition itself as a 'value brand' following its merger with Orange.

The new propositions have created a simplified 'menu' of tariffs, offering customers a core set of minutes and texts, and add-on 'boosters' that can be changed every 30 days.

The flexible 'boosters' include unlimited text messages, unlimited landline calls, unlimited internet and roaming. Customers will be able to change their booster each month simply by sending a text message.

Literature sent to retailers, seen by Mobile, informed of the 'tariff refresh' that would create 'great customer offers' and would 'value customers'.

Strategy Analytics director of wireless network strategies Phil Kendall explains: 'T-Mobile has always been strong in the value segment. It has been slogging it out with 3 in that segment for a while.'

So will the changes fundamentally affect T-Mobile's position in the market? Kendall thinks not, but adds: 'Flext is an interesting offer and it still stands out in the market. It is a logical way to sell from a consumer point of view but from an operator's perspective, it is too consumer friendly.'

However, the view from T-Mobile and the people selling its products indicate that is exactly the approach the operator wants to take.

T-Mobile head of pay monthly Stephen Mitchell says the network started looking at its products portfolio as far back as eight months ago. The operator talked to more than 5,000 customers and it emerged that tariff structures are too complicated, he says.

And the operator isn't alone in that view. Consumer watchdog Consumer Focus released survey results in October 2009 that revealed customers are often confused by tariff packages.

T-Mobile head of propositions Jon Cowan says: 'It is about putting the customer in control and trying to make things transparent. It's about common sense and challenging the rules that exist.'

The developments in the network's strategy tie in with a new approach to devices, which will see a wider range of handsets and its customers using high spec devices such as those powered by Android at a low cost.

Cowan says: 'We have now got market leading tariff value, but that has to be aligned with the devices strategy. There are Android handsets available from as little as £20 and internet comes as standard; we want customers to engage with the technology that is out there.'

The top executives are not the only ones who have signed up to the view that simpler tariffs with a wider range of handsets will be beneficial to the customers. Retailers and independent partners are also positive over the changes.

One experienced retailer says: 'They are making it really straightforward. The great thing is that the "boosters" are interchangeable and it may work better for us. It will create more value for the customer and it is going to be very flexible.'

But all of this change, anticipation and positive hype must be viewed in context, with the T-Mobile and Orange merger providing an interesting backdrop.

Since news of the tariffs refresh emerged, speculation on further changes in connection with the merger have started to circulate.

At the time of the joint venture announcement, CEO of Strand Consult John Strand put forward the idea that T-Mobile would be positioned as a value brand and Orange would push towards being a more premium brand.

Orange has already indicated that it will go after the high end with an ever-increasing range of 'multimedia' devices, including the iPhone.

Strand continues to stand by his position. He says: 'They [T-Mobile] are trying to make their tariffs much easier to understand and show value for money. Richard Moat knows price is key and value is King Kong.'

The new tariffs are without doubt a re-assertion of T-Mobile's place in the market - but so far it hasn't radically moved away from where it was a few months ago.

However, it has brushed up its offerings and this move is an indication of where it is looking to go in the future. Considering the way the market is changing, T-Mobile might be one step ahead of its rivals.
Written by Mobile Today
Mobile Today


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