DT CFO Says T-Mobile Can Stand Alone, Hesse Says U.S. May Be Open to Pro-Competitive Deal
Deutsche Telekom has a “clear path toward LTE” for T-Mobile USA, DT Chief Financial Officer Timotheus Höttges said. “There’s always a perception that if these guys are selling an asset it must be a problem child,” he said, referring to the failed deal for AT&T to pay DT $39 billion to buy T-Mobile. It’s not a problem for Deutsche Telekom, he told a J.P. Morgan investor conference Wednesday. “There’s no need for us to enter into any kind of deal at this point in time.” The German company was reportedly in talks to combine MetroPCS and T-Mobile. As part of the company’s restructuring plan, T-Mobile plans to cut 900 more jobs.
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Regulators would be more open to carrier consolidation if any deal would create more competition for Verizon Wireless and AT&T, Sprint Nextel CEO Dan Hesse said at the same conference. However, now isn’t the time for a merger for Sprint, he said. When asked about Verizon’s Wireless’s deals to buy four cable companies’ AWS spectrum, Hesse said he believes the FCC is aware of the problem of potentially too much spectrum consolidation. Sprint and T-Mobile recently joined the newly formed Alliance for Broadband Competition, which opposes the deal (CD May 15 p6).
T-Mobile USA is generating sufficient cash flow to “self-fund” its network upgrades and expansion, Höttges said. T-Mobile’s planned LTE network, which will run on its AWS spectrum, will be supported by major vendors, the CFO said. As for a potential iPhone on T-Mobile, “we hope that we would get a decent portion without being forced into a huge volume commitment. That is something we cannot afford,” he said. “We hope that we can help grow Apple’s business in the U.S. without a different chipset."
Verizon Wireless expects a revenue increase due to its new offer that allows data sharing among different devices, CFO Fran Shammo said. Unlike the carrier’s current offerings, the company plans to allow customers to share their data allowance among multiple devices, encouraging customers to connect more devices to Verizon Wireless’s network, Shammo said. As a result, customers are more likely to sign up for higher-tier data services, he said. However, data sharing would mean the carrier has to change its financial reporting practice from average revenue per user to “revenue per account” to more accurately measure wireless revenue, he said. The carrier plans to migrate its customers on unlimited 3G data plans to LTE, which would be the foundation of its coming data sharing service, according to Shammo.
In an internal memo to employees, T-Mobile CEO Philipp Humm said the company will continue with its restructuring. That means 900 more job cuts, according to a spokeswoman. The reorganization will allow the company to focus on modernizing its network to LTE, repositioning the T-Mobile brand and expanding its business-to-business segment, the memo said. “This is not about T-Mobile getting smaller,” it’s about repositioning for growth, she said.
T-Mobile plans to move quickly to fill an additional 550 positions this year, the spokeswoman said. Employees affected by the restructuring are invited to apply for any of these openings, she said. The new positions are in addition to the 1,000 new B2B sales representatives it plans to hire in the coming years as the carrier “aggressively pursues that opportunity,” she said. T-Mobile announced a net loss of 1,900 jobs in March to consolidate the number of its call centers around the country from 24 to 17.