Thought Leadership: Global or stay close to home: Which marketing strategy will drive T-Mobile and Sprint post-merger?

By Sigvart Voss Eriksen, CEO of Tapad — Recently, Sprint and T-Mobile confirmed their merger. Back when the possibility of such a consolidation was announced, there was a lot of speculation about what this could potentially mean — not just for the telco industry, but for marketers within that industry as well. Now that the merger is off to the races, the next question is this: which marketing strategy will Sprint/T-Mobile employ to compete with the existing giants such as Verizon and AT&T?

While there are several strategies at play, one way to look at this is to think about how telcos approach marketing around the globe. For example, if you look at the U.S. approach, it’s focused on trying to create advertising opportunities using one’s own data. The creation of Oath is one instance of this, as it centered around using proprietary data to create and monetize their own advertising solutions. However, if you look at the rest of the world, this is a very small part of any telco’s business. There are companies that are trying to monetize on behalf of telcos, but few have been successful so far. Instead, these global telcos are more focused on how proprietary data can bolster their own understanding of consumers in order to build more personalized marketing strategies to both current and prospective customers.

So will T-Mobile and Sprint take the rest of the world’s strategy, or go down the path of monetizing data from an advertising perspective?

The obvious benefit to the U.S. approach is that it generates an additional revenue stream for telcos. For the longest time, it has been a worldwide mission of any telco to monetize the wealth of data that it possesses. However, the challenge is that, while the typical telco consumer might be willing to trade privacy for free services from Google and Facebook, it is not clear what the incentive is to trade their privacy to a vendor they are already paying. This gets more complicated in the event that a consumer does not even have a positive relationship with their telco provider. Furthermore, when taking this “trade” into consideration, there is the possibility that the telco will now have an even deeper dataset and be able to have even more visibility into the consumer’s digital behaviors.

Advertising monetization on its own is a sensitive topic. As seen in the case of WhatsApp and Facebook, there can even be inter-departmental disagreement on its value. As T-Mobile and Sprint merge, this begs the question of whether each company is even on the same page in terms of marketing strategy and the value of data monetization.

Given these caveats of advertising monetization, the opportunity appears to favor taking the global approach. The situation as it stands opens the room for a player like T-Mobile and Sprint to take a position that they will not compromise on consumers privacy by committing to only utilize the data for their own marketing purposes. As the Cambridge Analytica scandal has shown us, the trust relationship between consumers and the brands that process our data — and that we trade our privacy with — is incredibly fragile. By taking the global approach, telcos like T-Mobile and Sprint can avoid privacy pitfalls (including GDPR for a European audience) while still opening the doors to create significant value for the core business by significantly improving the customer experience and marketing efficiency.

For example, global telecom Telenor leaned on a customer data platform (CDP) to gain a better understanding of their consumer base. Having this extra insight is especially pertinent to telcos, as they lose sight of consumer behavior once they are logged on to wifi (which, for many people is most of their working hours or time spent at home — a significant portion of the day). By focusing on this proprietary data, rather than creating new revenue streams to monetize, one Nordic subsidiary of Telenor saw a 27 percent lift in online conversions, increasing their potential to sign on new consumers and/or upsell existing ones.

With that in mind, T-Mobile and Sprint have a choice to make. As of now, they are in a great position to use their own data to pursue what seems to be their core strategy, namely to really conquer the market. Ultimately, it may come down to being a question of each company’s individual goals. While both are actively pursuing 5G, T-Mobile has been strong supporter of the “converge and disrupt” strategy, especially as it related to cable TV. We will have to see which priorities determine the direction and focus for the newly-merged entity.

(Originally posted on RCR Wireless)