Carrier CEOs Touch on Customer Trust
Trust is central to mobile operators' relationships with consumers, and carriers may have their work cut out for them in restoring that trust, based on executives' comments during a keynote session on Tuesday at CTIA Wireless.
The CEOs of the top four mobile operators in the U.S. -- AT&T, Verizon Wireless, Sprint Nextel and T-Mobile USA -- gave short presentations in the late-afternoon session and then sat down for an on-stage interview by Jim Cramer, the host of CNBC's stock-market show "Mad Money."
The executives found frequent opportunities to plug their own services but also touched upon a few more general issues. For example, all said a looming shortage of spectrum is a critical issue for the industry, surprising no one who has been following carriers' statements in recent years.
Sprint CEO Dan Hesse kicked off the discussion on trust in his presentation when he cited a 2012 survey by the Reputation Institute. Hesse said the survey showed the mobile industry ranked lower than any other major industry, including the much-maligned oil industry. Yet reputation is a key asset for a carrier, he said.
"Trust has never been more important for any industry because there has never been a device in human history more personal than the smartphone," Hesse said. Phones go everywhere with consumers, hold their personal data and even monitor their health in some cases, he said.
Consumers' growing concerns about mobile security present both a danger and an opportunity for carriers, Hesse said. In the wake of recent scandals concerning the collection and use of data from mobile phones, consumers don't understand security problems but want to turn to a trusted party to solve them, he said.
"Our response to customer needs for safety, security and privacy will play an increasingly important role in building or in damaging our reputations," Hesse said.
The alarm was partly a lead-in to a pitch for Sprint Guardian, a set of security tools that Sprint announced on Tuesday for Android devices. Sprint Guardian will become available this summer on Sprint's app store in a choice of several packages. Among other things, the tools will include malware and phishing protection, lost-phone location, software to control childrens' phone habits, and a tool for tracking all the members of a family.
Building trust can also benefit carriers' bottom lines as they compete against so-called over-the-top service providers, such as Google and Amazon, for financial relationships, Hesse said later.
"If they trust us they are going to buy from us. They are going to have a personal relationship with us," Hesse said.
After T-Mobile CEO Philipp Humm unveiled a TV ad promoting service on T-Mobile as faster than AT&T's Apple iPhones, Cramer asked whether criticism among the carriers hurts all their reputations. Ralph de la Vega, president and CEO of AT&T Mobility, said it did. "We take the truth and we stretch it," de la Vega said. Naturally, he pointed to T-Mobile's ad as an example. In tests in several cities by PC World, AT&T had the fastest LTE network in the country, he said. (PC World is a sister publication of the IDG News Service.) The iPhone doesn't use LTE, so T-Mobile's claim sidestepped a comparison with the fastest part of AT&T's network. "One of the things we need to do is to talk straight," he said.