Alaska Airlines plans to shift the majority of its behind-the-scenes wireless business to T-Mobile — creating a new connection between two Seattle-area companies, and illustrating the Bellevue-based wireless carrier’s growth potential in providing 5G services to large government and business customers.
T-Mobile rival AT&T had been Alaska’s longtime wireless carrier, although T-Mobile and Alaska did not mention that fact in announcing the news Monday morning.
“We get to serve our hometown airline, so we’re really thrilled about it,” said Mike Katz, president of T-Mobile for Business, in an interview with GeekWire. The companies have a similar focus on customer experience, he said. Due in part to its location, T-Mobile is already a major customer of Alaska for its own travel needs.
Alaska is headquartered in SeaTac, Wash., near the airport south of Seattle. Alaska CEO Ben Minicucci also referenced the common geography in the T-Mobile press release: “As two Pacific Northwest-based companies, innovation is in our DNA,” Minicucci said in the release.
Initially, at least, Alaska is focusing on adopting T-Mobile’s 5G network for its own operations, not for customer applications.
But long-term, the companies say they will also focus “on new capabilities, features, and perks specifically for passengers who use T-Mobile.”
Alaska already offers Gogo in-flight Internet, which includes free access for T-Mobile subscribers. That isn’t expected to change, Katz said.
Alaska decided to adopt T-Mobile as its preferred wireless provider after months of “rigorous” testing, Katz said. Alaska will use T-Mobile data and voice lines to provide connectivity for devices and services in areas such as ticketing, check-in, baggage tracking and other behind-the-scenes applications and operations.
“Ultimately, the decision came down to, does this network perform better than the incumbent? And do they have confidence that it’s going to remain that way over many years?” Katz said. “The decision speaks for itself.”
He said the decision shows the potential for T-Mobile to accelerate its expansion beyond the consumer market that has fueled much of the company’s growth.
T-Mobile’s $26.5 billion merger with Sprint, completed last year, bolstered the build-out of its 5G network. Historically, T-Mobile has had about 10% market share in large enterprise and government accounts, Katz said, and the goal at the time of the Sprint merger was to reach 20% market share in this area over five years.
Announcing its third-quarter earnings, T-Mobile said it added more enterprise customers on both a gross and net basis than in any similar period in its history.
T-Mobile declined to disclose the financial terms or revenue expected to result from the deal. The wireless carrier’s shares closed Monday at 115.63, up 2.5%. Alaska Air Group closed at 50.62, up 4.22%.