Lock-in is bad

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Over the summer I bought a new house and had some major problems getting broadband access (details perhaps in another post). Through a series of events I ended up with a T-Mobile hotspot account so I could work from a nearby Starbucks. I cancelled the account once I had access at home once again (cancellation didn’t go smoothly, but that, also is another post).

Now T-Mobile is doing a marketing survey with former customers. It gives a little insight into what they’re considering offering and the thought process of a company like this. Along with asking me if I’d be interested in bundling plans with phone service, and different price points, they asked about offering high-speed cellular data service like Sprint and Verizon. And they asked about bundling these services with Hotspot service.

Then they asked a series of questions about what would make me come back to T-Mobile…

T-Mobile HotSpot offered exclusive and relevant content (music, video, news, location based information, etc.) only available with the service.

The marketing people are looking for ways to add value and the best they come up with is a walled garden? This is the old way of thinking. Offer exclusive content and people will want to sign up to get it and won’t want to leave because of it. It’s not just T-Mobile; SBC and Comcast air ads promising exclusive music if you use their servicecs.

The walled garden is dead, folks. Even AOL finally realized they were riding a lame horse and opened up their content. Realistically, how many people are going to sign up for T-Mobile just so they can get a branded music and news page?

Here’s the other brillliant reason T-Mobile thinks you might use their service:

I purchased a new device such as a Wi-Fi enabled camera, gaming device, MP3 player, or phone that used T-Mobile HotSpot as their exclusive wireless broadband service provider

What crack are they smoking? If I bought a wifi camera or phone and discovered that I could only use it at T-Mobile hotspots, I’d be mighty annoyed. Forget the $40 a month part for a minute. You’re telling me that this new camera I bought to connect to my wireless network will only work at Starbucks? If I want to pulll the pictures off my camera I have to make a trip to the coffee place. That’s a gadget that will be returned immediately.

What device maker is going to jump on this deal anyway? Can you see Creative Labs or Apple building an MP3 player that has built-in wireless but only connects to a T-Mobile hotspot? They aren’t going to do that voluntarily. T-Mobile might be able to pay them to do it, but then where’s the economic benefit of creating the lock-in in the first place?

Consumers are in control now. Hotspots aren’t rare things anymore. T-Mobile has two things going for them — convenience and ubiquity. They’re easy to find and use and the things are everywhere. Instead of treating hotspots as if they are rare and special, T-Mobile needs to realize they are competing in a commodity market. Businesses everywhere are hosting public hotspots. Cities are starting to launch municipal wireless. Individuals have wide open access points with bandwidth for the taking. And T-Mobile thinks they’re going to sign up more customers with lock in.

If T-Mobile wants to acquire and keep customers, perhaps they should look at why people use the hotspots in the first place and build things to suit them. Price might be a good place to start. $6 a day is too expensive for anything but casual usage and $40 a month with a two month minumum is too expensive for anything other than hard-core usage.

They should look at their strengths. They should play on the idea that you can find one anywhere any time without hunting. That you can get fast, reliable access anywhere there’s a Starbucks, which means just about on every street corner in the US. And they should back it with good service. If I’m in a local bookstore or mooching off a neighbor’s wifi and something goes wrong with the connection, there’s no where to turn. But T-Mobile can offer the support that individual hotspot owners can’t.

Or they could try and sign up customers with a content play. Their choice.

Neil T.
December 14, 2005 8:37 AM

You think $6 is expensive? In the UK T-Mobile charge £6 (over $10) per *hour* for access. That's actually pretty typical here - most charge between £4 and £6.

A. Nony Mouse
December 15, 2005 10:33 AM

Great post! Nails it, both T-Mobile and marketing's "lock-in" mentality. I got this same survey and finally told them they were on crack and hung up. Best part is that they got my attention to do the survey by sending me an message, and by retrieving it, I paid $0.05 to retrieve a msg I didn't want.

Randy Charles Morin
December 18, 2005 9:48 AM

Can you say Yahoo Launchcast?

December 19, 2005 2:13 AM

Yea I had to do the same thing for awhile in Seattle run back and forth to the Starbucks but nothing beats a broadband connection from home which I have and cheerish now!

May 31, 2007 7:12 AM

I have been T-Mobile customer for nearly 16 years. Having enjoyed good services over the years, my only concern is that, T-Mobile has not been able to offer existing / new customers tarrifs like (calls to any number any time at affodable prices. At the moment 3 is offering this tarrif at about £15.00 for life, for 500 - 600mins per month. Two weeks ago about 20 of my friends who were T-mobile customers have switched over. What are you doing to lure your customers back? Mobile phone business is higly competitive now and you need to catch up with other providers.

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