- Consumer Cellular is adding retail stores at a time when many physical stores are expected to close thanks to AI
- The company is using AI, but it’s not going to launch a bunch of chat bots to answer customers’ questions
- The MVNO caters to an older age group; the average age of a Consumer Cellular customer is 64
To say that Consumer Cellular has a lot going on is an understatement. But what’s really remarkable is how it’s adding more retail stores and using real live people to answer customer service calls in an industry increasingly awash in AI.
For the uninitiated, Consumer Cellular is an MVNO that was founded about 30 years ago by two Portland, Oregon-based guys, John Marick and Greg Pryor. Early in their tenure, they decided to focus on the 50+ age group and align the company with AARP. That turned out to be a brilliant move, as Consumer Cellular grew to about 4 million subscribers, outliving many other MVNOs that went belly up.
In 2020, they sold the business to GTCR, a private equity (PE) firm. Oftentimes, when companies sell to PE firms, people freak out because they figure that’s the end of it. After all, PE firms have a reputation for gutting businesses, draining them of all resources and leaving them a shell of their former entities.
Consumer Cellular CEO Ed Evans is familiar with that reaction. “I think when a lot of people hear the name or the word private equity associated with the company, they tend to think about what I would describe as the worst of the worst,” he told Fierce. “That is the antithesis of what GTCR has been about. GTCR has always been about finding a good management team backing them and then staying out of the way.”
Evans came in as CEO when GTCR took over Consumer Cellular. He had previously worked with GTCR on an investment in mobile messaging company Syniverse Technologies, so he was familiar with their style.
One of the biggest challenges they had when they acquired the company was migrating a little over a million subscribers from 3G to 4G because at the time, the big carriers were sunsetting their 3G networks.
“We had to migrate a million customers pretty quick,” which meant getting them new SIM cards and 4G handsets, he said.
Soon after that, they decided to do an RFP for all their network services. At the time, they had about a million customers on T-Mobile and 3 million on AT&T’s network. Ultimately, Consumer Cellular decided the opportunity was better with AT&T, which meant migrating the customers on T-Mobile over to AT&T.
Focusing on customer service
Despite the upheaval, they’ve been able to grow the business. Average revenue per customer was about $20 when GTCR acquired the company and it’s now more than $30. At the same time, they’ve seen moderate growth in subscribers, going from about 3.9 million to almost 4.4 million today.
“We’ve managed to grow pretty substantially,” Evans said. “It’s gone well and a lot of it has just been basic taking care of the customer. As simple as that sounds, it’s just about answering the phone when somebody calls in.”
All of Consumer Cellular’s customer service staff is based in the U.S., and its customer satisfaction scores consistently rank highest among its peers in the postpaid MVNO segment, according to J.D. Power.
“We work very, very hard to make sure you’re not sitting on hold for 15 or 20 minutes waiting to get to a rep and we’re not passing you around to 17 different departments,” he said.
Adding more Consumer Cellular stores
On the retail front, Consumer Cellular has been on a tear. It opened its first retail stores in Florida in 2022 and was up to more than 70 in early February, with the expectation of reaching between 120 and 140 stores by the end of this year. It also sells in Wal-Mart but has a diminished presence at Target.
“What we learned in the retail stores is that the lifetime value of a customer we get out of our retail stores is significantly better than what we get through any other channel,” Evans explained. “Churn is lower. The customer stays longer. They tend to buy a higher end phone and a higher rate plan, so … just everything about the customer is materially better.”
But they’re not going to add as many stores as, say, Verizon has been doing with Total Wireless.
“I don’t ever see us having 1,000 stores across the country, but seeing us with 200 to 300 of them where we can reach the majority of our base within about 50 miles is probably where you’re going to see us go,” he said.
Jeff Moore, principal of Wave7 Research, noted that at a time when many MVNOs are falling by the wayside, Consumer Cellular is growing.
“It's nice to see a company that's growing and building for the future, adding stores for example,” he told Fierce. “Obviously they have a game plan. I think they have very strong leadership and seem to have a better sense of direction than just about any other MVNO.”
How Consumer Cellular uses AI
Of course, we can’t talk about pretty much anything in telecom these days without discussing AI.
Consumer Cellular is actively deploying AI within its IT stack today, but instead of using AI to directly interface with customers, it’s looking to use AI to interface with customer service representatives so that they can better assist customers.
For example, today, the company is using AI to listen and record calls, then summarizing call transcripts and compiling notes so that the service reps don’t have to spend time typing up notes and adding them to the system.
The company’s plan is to use AI listen to calls and make recommendations to the customer service reps on how to handle issues. If a customer calls in and asks about international roaming, AI will hear that and suggestions will pop up on the screen with a bunch of answers surrounding that topic.
“The biggest challenge, I think, with every call center in the wireless industry is that wireless is incredibly complex and getting the right answer to the customer in a call center environment can be tough. So we're really focused on just getting the right answer to the rep and letting the rep deliver that answer to the customer,” he said.
The average age of a Consumer Cellular customer today is 64. “I would not expect us to see us using AI chat bots or using AI voices to communicate. The cohort that we're in is very sensitive to that. It doesn't have a lot of trust for AI,” he added.
Industry changes afoot
What keeps him awake at night is “everything,” he quipped. But in all seriousness, “we’re in a mature market,” and that’s when companies start doing crazy things, like getting into price wars and things of that nature.
2026 is probably the year where there’s the least amount of visibility in terms of knowing what to expect in the market, he said, citing new CEOs at both Verizon and T-Mobile who have very different ideas about what they want to do.
“They’re all pushing very aggressively for AI solutions that may, in fact, work great, or they could be complete disasters. I don’t know, but what we’re focusing on is our DNA and that DNA is taking care of the customer,” he concluded.
Article updated to reflect Consumer Cellular had 3.9 million subs when GTCR took over.