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T-Mobile's Free WiFi Calling: Will it reduce customer turnover?

May 16 2011, 2:12pm CDT | by , in News | Technology News

T-Mobile's Free WiFi Calling: Will it reduce customer turnover?

Can anything?

These are not bright days at T-Mobile. The company lost 99,000 customers in Q1 2011. They are bleeding subscribers, and have been for some time. Antitrust concerns may keep the AT&T acquisition from going through. If that happens, T-Mo faces a slow death of a thousand cuts from their better-positioned opponents.

The embattled carrier has one hope: staunch the flow of customers before they lose any more market share. Since customer service is considered to be one of T-Mobile's few great strengths, it makes sense that they'd seek to improve retention by delivering a better user experience. Towards this end, the network has just announced that WiFi calling will now be free for all subscribers.

In Q1, T-Mo saw smartphone subscriber growth of 1 million users. This is a crucial market for them. Anything that could motivate more people to go in on a T-Mobile smartphone plan must be pushed. The Kineto Smart WiFi app will benefit the carrier in two ways. First, it's an attractive, free service that will encourage growth and may keep a few more customers from switching their carrier.

And second, it encourages WiFi use on smartphones. The less smartphone owners use their data, the more money T-Mobile saves. Placing a WiFi call over your phone doesn't cost T-Mobile anything. It actually saves them money. You're still paying the same amount for your account, but your cost to them goes down.

Free WiFi calling is a smart move for T-Mo to make. It won't be enough to stop their churn, but it seems like it might help. Which begs the question- is there anything T-Mobile can do to actually reverse their losses?

If those rumors of a T-Mobile iPhone 5 prove true, it would help a little. But an iPhone on every carrier leaves the carrier with the same problem they have now: Convincing customers that there is some crucial difference between T-Mobile, and the competition. Even with free WiFi calling, that's a tall order.

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