1 Wireless Industry Overview: The Impact of Competition and Financialization on Wireless Workers CWA Wireless Workers Conference November 2016, San Antonio, TX The Wireless Communications Industry is Dynamic Wireless coverage approaching
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Presentation Transcript
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1 Wireless Industry Overview: The Impact of Competition and Financialization on Wireless Workers CWA Wireless Workers Conference
November 2016, San Antonio, TX<br>
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The Wireless Communications Industry is Dynamic Wireless coverage approaching 100%.
Majority of households soon to be wireless-only
Market penetration at 116% of subscribers
Data is taking off! 2<br>
03
Content Companies & Network Carriers in the Wireless Industry: A Virtuous Circle 3 Network Content Infrastructure:
Cell sites
Spectrum
Satellites
Fiber
Copper Content:
Web Sites
Social Media
Music
Video
VOIP
Games
Smart Car
Smart Home Google, Netflix, Facebook, etc. AT&T, Verizon, T-Mobile, Sprint Services: Voice, Text, Email, Internet Access<br>
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The Companies Who Build and Service the Networks Wired + Wireless 4 AT&T
Verizon Pure Wireless T-Mobile
Sprint New Entrants:
Google
Cable Cos.<br>
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Networks Require Greater Investment than Apps & Social Media 5<br>
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Employment at the Network Carriers Leveling Off – but watch out for contractors 6 Contractors<br>
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Wireless Market Share (and the fight over subscribers) 7 Source: FierceWireless, August 15, 2016<br>
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Price Competition Drives Down ARPU (average revenue per unit) 8 Negative ARPU trend puts pressure on network companies to deliver profits
Company response:
Sales programs to attract and retain customers
“efficiency” programs to cut labor costs<br>
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Company Response: Attract and Retain Customers Company Goals:
Maintain current customers to stabilize churn
Acquire new customers to increase profitability
Increase number of devices, services, accounts per customer Company Tactics:
Sales and marketing programs
Bundling
Early Termination Fee buyouts
Free devices
No contracts - EIPs
Retention 9<br>
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Company Response: “Efficiencies” to Target Workers Company Tactics:
Performance metrics
Monitoring
“At risk” pay
Outsourcing
Replace workers with technology
Forced overtime Company Goals:
Reduce overhead and labor costs 10<br>
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Outsourcing – Tactic to Cut Costs 11 Use non-union, low-wage call centers
AT&T has presence in the Philippines, Mexico, and elsewhere
VZ contracted out over 5,000 jobs in the Philippines, Dominican Republic, and Mexico
TMUS has 17 in-house and 25 outsourced centers
Sprint has cut 6,000 customer service jobs in three years due to technology and outsourcing
Shift retail function to third-party, authorized dealers
GameStop now owns 1,421 AT&T authorized stores
20% of 10,000 T-Mobile retail stores, are corporate owned
All carriers sell through Best Buy, Costco, Target, etc.<br>
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Unreasonable Metrics Drive Bad Customer Service 12<br>
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In This Competitive Environment, Some Prosper More than Others 13<br>
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Some Prosper More than Others, Part 2 14<br>
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Financial Strip Mining at AT&T and Verizon Financialization = Financial strip-mining:
Company is seen as a cash cow
Rewards flow to shareholders
Shareholder Reward = Dividends + Share Buybacks
126% of net income at AT&T, 2011 - 2015
98% of net income at Verizon, 2011 - 2015 15<br>
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Consquences of Financial Strip-Mining in a Competitive Industry Competition exerts pressure on revenue and earnings
Financialization siphons off profits for investors and execs, so less money is available for cap ex and wages and benefits Could lead to
Increases in debt
Delay in network upgrades
Decline in network quality
Decline in service quality
Increase in income inequality 16<br>
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Summing Up… Wireless industry is dynamic
Content companies are thriving but not paying their fair share of building the network
Network carriers in fierce competition
Pressure to cut costs harms workers
Aggressive sales tactics harm customers and may be unethical
CEOs and shareholders rewarded handsomely 17<br>
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The Challenge for CWA CWA’s Goals:
Increase union presence
Negotiate for our share of success
Take on Wall Street
One Industry, One Workforce, One Fight 18<br>
