It arguably always is easier for a challenger to take market share in an established market than to create a new market. T-Mobile seems to be taking that route in the U.S. mobile market. Verizon, the market leader, seems to be taking the other approach, looking to create new markets in edge computing, for example.
T-Mobile instead plans to take market share in rural areas, business accounts and home broadband. The first two segments are areas where T-Mobile historically has lagged its major competitors, while the last segment is new for mobile service providers, but with a proven and large demand.
T-Mobile aims to increase its share of business-liable accounts from 10 percent to 20 percent, with grow in public accounts as well. T-Mobile also expects to garner seven million to eight million home broadband accounts by 2025. The only issue is which current providers lose that share.
Assuming $50 monthly revenue, and an annual total of $600, that implies T-Mobile could generate $4.2 billion to $4.8 billion annually from home broadband services within four years. It might be challenging to create that much revenue from new sources any other way, within four years.
Verizon, for its part, believes edge computing could be a $10 billion opportunity in 2025. If Verizon captured 10 percent of that opportunity, its revenue could grow $1 billion. If Verizon got 20 percent, then revenues could be $2 billion.
That illustrates the advantages of “taking share in an existing market” versus “growing a new market.” In the former case, one knows precisely what the demand is; what the value proposition is and how competitors are positioned. In the latter case all that must be discovered and seized.
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