- MobileX is offering free talk, text and up to 2 GB of data/month for customers who’ve lost federal food assistance
- CEO Peter Adderton challenges bigger rivals AT&T, Verizon and T-Mobile to join in, saying it’s “the right thing to do”
- Analyst sees both purpose and PR, noting that losing customers due to an inability to pay amounts to involuntary churn – and nobody wants churn
MobileX CEO Peter Adderton is challenging carrier CEOs in the wireless industry to step up and help people who are losing federal food assistance due to the lapse in the Supplemental Nutrition Assistance Program (SNAP) benefits.
MobileX announced this week that it will cover the cost of its wireless service for customers – new and existing – who have lost access to SNAP. The offer includes unlimited talk and text, plus up to 2 BG of data/month, which will be covered for as long as their SNAP benefits are disrupted.
Call it a PR stunt if you want, but Adderton says it’s the right thing to do. “At the end of the day, no one else is doing it. Why aren't T Mobile, AT&T and Verizon doing it? They all should be doing it. We’re probably the least financially strong compared to the other guys, but we're still willing to do it. I'm hoping that I will be able to get the rest of the industry to join me.”
Fierce reached out to AT&T, T-Mobile and Verizon about what, if anything, they’re doing. None of them immediately responded specifically about assistance for SNAP recipients, but Verizon and AT&T both put out press releases about two weeks ago to address payment arrangements for customers facing financial hardship.
In Verizon’s case, it invited members of the U.S. Military, Coast Guard, first responders and other federal government employees affected by the shutdown to call the company and ask about payment deferrals. AT&T wasn’t as specific but told people that if they’re worried about paying their bills on time, it offers postpaid payment deferral options.
After this story first published, a T-Mobile spokesperson sent the following statement to Fierce: "As always, our customers are at the center of everything we do, and we’ll continue to look after them, making sure they stay connected to what matters most."
MobileX says it’s ‘uniquely positioned’
Adderton said MobileX, which is an MVNO that uses Verizon’s network, is uniquely positioned to address consumers’ needs right now because the MobileX service was created to save people money.
The company uses AI to help customers customize their wireless plans so they only pay for the data they need rather than splurging on unlimited plans where much of the data goes unused. The MobileX service can be activated in various ways, including at more than 3,700 Walmart stores.
MobileX CEO: We do care
Adderton acknowledged there’s an element of promotion in everything they do at MobileX. And rest assured, Adderton knows marketing. Beyond building the Boost Mobile brand many moons ago, he’s once again tapping sports and race car themes to promote the MobileX brand and appeal to the youth market.
“But the fundamental principle of any brand that I've ever been involved in is the humanitarian side of it, and that’s what we're doing today,” he said. “We are authentic and we do care. If people want to put that down as a promotional opportunity, fine. Call it whatever you like. It’s free.”
To be fair, acquiring subscribers actually costs service providers more upfront due to marketing and provisioning expenses and it takes a while to recoup those costs. In the case of SNAP, MobileX also has to verify consumers’ eligibility requirements.
“We won't make any money, but if everybody does it, I would consider that to be a massive win for the for the consumer,” he said. “If they want to go back to their provider afterwards, they can go back to their provider. We're not requiring them to sign up for three months or six months.”
Most SNAP recipients are likely prepaid phone customers as opposed to postpaid because “I don’t think people who benefit from SNAP are probably buying $1,700 iPhones,” he said.
Analyst: It’s PR and that’s not bad
It behooves carriers to make an effort to keep customers who are experiencing financial distress because otherwise they fall into the “involuntary” churn bucket, where they leave their carrier due to inability to pay. Voluntary churn is where they leave their carrier because they prefer to pay someone else.
Either way, churn isn’t good. “That’s something to be avoided,” said Jeff Moore, principal of Wave7 Research. He still remembers working at Sprint years ago under then-CEO Dan Hesse when their annual bonuses were tied to churn rates, an indication of how important churn was and still is to carriers.
Generally, when there’s a hurricane or other disaster, carriers will suspend calling charges for affected customers or offer some kind of discount. “This is probably fairly similar and it’s really more for PR purposes,” Moore said. “It’s not a bad thing.”
Not Robinson Crusoe
MobileX believes it has the capacity and firepower to be able to offer this, but if it goes on for a long period of time, they may have to review it, Adderton said.
Granted, there’s a degree of whiplash happening in terms of whether people will receive food aid payments this month, but Adderton is of the hope that U.S. leaders will come to their senses sooner rather than later.
In case you’re wondering, he’s not publicly taking sides. “I'm on the consumer side because I think both sides are being ridiculous. At the end of the day, you can have a debate on different political issues. I'm fine with that. That’s what America is all about. But when it impacts real people who rely on this, then that's a very different scenario,” he said.
“I'm not looking to be Robinson Crusoe here,” he said. “I just want to try to get everybody to step up now, when 42 million Americans need it.”
This article was updated with a statement from T-Mobile.