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Vodafone has announced it will offer mobile services to business users in the US, following an MVNO agreement with T-Mobile USA. Vodafone had already announced plans to extend its enterprise portfolio in the US; the deal with T-Mobile is a key part of this. Becoming an MVNO of an existing GSM-based carrier is a smart way to enter the US market and quickly provide services on a national basis. From a high level, T-Mobile was a better fit than aligning with AT&T. T-Mobile is currently the most aggressive operator in the US, with creative consumer promotions and disruptive rate plans. It has positioned itself as the "un-carrier" to the consumer market in the US and has invested in upgrading its network. Vodafone has the experience and knowledge to become a successful MVNO and offer a fully integrated enterprise mobile service suite. However, it may have under-estimated the level of effort it must make to overcome T-Mobile's consumer image and its relatively poor coverage outside the major metros.
T-Mobile's coverage is still not the best in the US, ranking third or fourth depending on source. T-Mobile has always stated that its coverage has been focused on major US urban markets. It has invested to expand its network and is upgrading to LTE Advanced. However, Vodafone will not be investing any more capital to grow T-Mobile's network, so domestic roaming will be the short-term fix. Vodafone's MVNO start-up activities, integration, and service launch are due to be completed in late 2015. Even with successful integration, coverage will remain a constraint on how and where Vodafone can sell its enterprise mobility services.
Because T-Mobile has been successful as the "un-carrier" (the service provider of solutions domestic carriers do not think of) and is primarily a consumer brand in the US, there should be little conflict between Vodafone and T-Mobile's go-to-market efforts. Vodafone may be able to leverage this same un-carrier image for its enterprise customers in the US. Vodafone's OneNet service and its Red international roaming program will be offered across the MVNO and should attract the attention of enterprise customers. This is the good part: an MVNO with a lot more service to offer.
T-Mobile's network is tuned for its service model, and its device portfolio appeals to consumers, so Vodafone will have to provide overlay marketing and services to convince its enterprise targets to adopt its service. Today T-Mobile does not have an agreement with BlackBerry, for example. Vodafone, as the MVNO, will have to invest in additional marketing and services (including devices) to increase its enterprise market acceptance in the US.
Vodafone will eventually have to depend on domestic roaming to fill in any gaps of coverage or quality of service (QoS) in the US. Many of the Vodafone enterprise mobility services that require LTE or a certain level of QoS (like any VoLTE implementation) will require enhanced roaming and hand-off capabilities in the mobile network. Vodafone has just started integration work, and needs to decide how to introduce its enterprise mobility services: for example, for One Net Enterprise, it is deciding between IMS integration and VoLTE. In any case, domestic roaming in the US will be crucial for the simple fact the T-Mobile's coverage is not adequate for many enterprise customers' requirements. Fortunately, Vodafone has existing relationships with AT&T and Verizon for M2M in the US that it should be able to leverage.
Mike Sapien, Principal Analyst, Enterprise
Vodafone: Targeting Global Leadership, TE0005-000664 (November 2014)
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