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Our home for bold arguments and big thinkers.

AP Photo/Ted S. Warren
He’s coming for your data.
GIVE 'EM CREDIT

T-Mobile’s brilliant move to win that other emerging market—the United States of America

Donald Fitzmaurice
By Donald Fitzmaurice

CEO, Brandtone

DUBLIN, Ireland—Mobile operators are a perplexing lot. Despite owning an entire network and having privileged access to the subscribers on that network, they are so reluctant to engage directly with these individuals in a meaningful way.

And yet they want to build trust and loyalty in what is an increasingly commoditized market.

And yet they throw open their networks to other organizations and provide them with access to their subscribers. Often on terms defined by a regulator.

Risky business. Go figure.

It’s no wonder subscribers have such a litany of complaints, spam to fraud. Case in point: Turkcell and its spammed-to-death subscribers.

The alternative is clear: Mobile operators must establish a trusted relationship with each subscriber by providing them with additional differentiated products and services that are both relevant and timely. They must also insist that other organizations play by the same rules.

Last week’s announcement by T-Mobile of its ”Smartphone Equality” program provides welcome leadership in this respect—a program that will make the latest smartphones and tablets available to subscribers, interest free with no down payment—provided they have paid their bill on time for 12 months. Translation: Their credit scores on everything else matter less than whether they can pay their phone bill.

Not only is this the sort of relevant and timely engagement that will build trust and loyalty that will attract and retain subscribers, but it also points the way forward for mobile operators facing the daunting prospect of being little more than a commodity in their customer’s life. Which is ironic given that the mobile has come to mean so much, to so many.

In making this announcement, T-Mobile’s CEO John Legere stated, “The simple truth is that our relationship with that customer is actually a better predictor of future behavior than their credit history.”

T-Mobile has understood that the call and payment history of their subscribers—properly analyzed—allows it to develop a highly effective real-time proxy for the traditional credit score and to make an attractive (relevant and timely) offer to subscribers.

The play is hardly a new one. Innovative companies such as Cignifi and mobile operators such as Airtel have been using such an approach to provide “credit scores” to financial institutions for the unbanked in developing and emerging markets for some time now.

The opportunity for T-Mobile, Airtel, and other operators is to provide real-time credit scores to third parties—with their subscriber’s permission, and in their interest—to allow individuals with limited credit histories a chance to successfully apply for credit cards and student loans.

The opportunity down the line is for operators to provide a similar service in the area of healthcare—just as mobile operators have the ability to understand the credit score of a subscriber in real-time, they will have the ability to understand their “health score” in real-time with the advent of networked wearables. In this context, it is possible that an important trend for the future will be the “partitioning” of mobile networks to provide dedicated, secure and regulated “pipes” for the provision of such premium services.

T-Mobile has shown how intelligent mining of vast amounts of subscriber and “real-time” data allows for more meaningful engagement, building trust and value in the process.

In other words, it allows mobile operators to be much more than just a phone to their customers.