T-Mobile CEO Humm unveils turnaround plan, says 10% of churn caused by iPhone

During the company's annual investor day conference in New York, T-Mobile USA CEO Philipp Humm unveiled a comprehensive turnaround plan he said will revitalize the company. The strategy includes reducing churn, growing revenues, pursuing new markets such as the enterprise market and considering strategic alternatives such as network sharing, partnerships and even spectrum leasing.

T-Mobile USA CEO Philipp HummInterestingly, Humm said 10 percent of T-Mobile's churn is due to customers migrating to the iPhone. He said the company will combat the leakage by launching more Android-based devices. According to PCMag.com, T-Mobile will offer 4G HSPA+ versions the Sidekick and the Samsung Galaxy S. As for the iPhone, Humm said according to PCMag.com that T-Mobile's 1700Mhz 3G spectrum is the major barrier to it obtaining the iPhone. The iPhone currently does not support T-Mobile's 3G spectrum bands, only those of AT&T Mobility (NYSE:T).

Humm added that the company plans to launch competitive iPad tablet offerings in March and April.

In one of his first public appearances as T-Mobile's new CEO, Humm admitted that T-Mobile's growth stalled starting in 2008 primarily because the company was late migrating to 3G. He added that the firm also had a poor branding strategy and distribution problems. Humm said he believes T-Mobile is well positioned to overcome those issues and is already closing the gap on the competition by taking advantage of its core assets. Specifically, Humm touted T-Mobile's quick deployment of HSPA+ 21, which covers 200 million POPs today, and its plans to upgrade to HSPA+ 42 this year. He also said that 50 percent of the firm's device sales today are smartphones, which indicates continued growth in data revenues. Approximately 39 percent of T-Mobile's existing customer base uses smartphones, he said.

Humm said the company will unveil 25 4G devices this year. T-Mobile has branded its HSPA+ network as 4G. Interestingly, AT&T has said it will debut 20 4G devices this year (AT&T brands its HSPA+ network and its forthcoming LTE network as 4G). T-Mobile hopes to continue to attract customers by positioning itself as the value leader, offering as many smartphones as possible under the $100 price point and providing an entry-level data package priced at $10 per month, Humm said.

Regarding T-Mobile's need to grow revenues, Humm said the company plans to drive $1 billion in savings by reducing customer care, migrating to a self-service and IVR system, simplifying rate plans and deploying an all IP network that includes building 1,000 more cell sites to reduce the company's roaming fees.

The company also will explore new MVNO relationships as well as rebuild its business-to-business sales program, which has atrophied during the past few years due to T-Mobile's focus on the consumer market.

Deutsche Telekom CEO Rene Obermann also spoke briefly about the parent company's commitment to T-Mobile USA. He said the firm is convinced that T-Mobile is a good asset, but noted DT is not opposed to exploring options such as forming partnerships with other firms, embarking on network-sharing arrangements or even selling non-core assets such as T-Mobile's tower portfolio. He said DT's goal is to make T-Mobile USA a self-funded entity.

For more:
- see these two PCMag.com articles
- see this WSJ article (sub. req.)
- see this Bloomberg article

Related Articles:
T-Mobile's Ray discusses HSPA+ 42, spectrum refarming and backhaul deployment
T-Mobile eyes nationwide expansion with new retailer program
T-Mobile eyes cheaper smartphones
T-Mobile: We'll match Verizon's LTE speeds with HSPA+ 42
T-Mobile, LG announce Honeycomb-powered G-Slate Android tablet

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