T-Mobile US (NYSE:TMUS) CEO John Legere pushed back against media interpretations of recent comments made by Timotheus Hoettges, CEO of T-Mobile parent Deutsche Telekom, which many outlets interpreted as Hoettges saying T-Mobile's torrid growth trajectory is unsustainable long term from a financial perspective.
Hoettges never said the word "unsustainable," though the original report on his comments from Re/code paraphrased him as saying that T-Mobile's current approach is "not sustainable," given that T-Mobile needs to invest between $4 billion and $5 billion each year just to remain competitive with AT&T Mobility (NYSE: T) and Verizon Wireless (NYSE: VZ).
"The question is always the economics in the long term … and earning appropriate money," Hoettges said. "You have to earn your money back at one point in time."
On Twitter, the outspoken Legere described one Ars Technica article ("T-Mobile owner says 'Un-carrier' business unsustainable without merger") as "total bullsh-it." He also labeled a Gizmodo article with the headline "T-Mobile Can't Afford to Keep Doing This Whole 'Uncarrier' Thing," as "terrible."
Deutsche Telekom still controls 64 percent of T-Mobile and has sought to sell off its stake at least twice in the past four years. In December, Legere dismissed a question during a conference call about DT's role in financial decisions at T-Mobile by saying, "They are an owner," he said. "I have a very scalable and funded business, and if they are a shareholder that wants to leave, I'm fine."
Hoettges praised Legere's leadership and competitive style in his interview with Re/code. And in November he called the U.S. unit "a great thing what we are experiencing here" and praised the performance of Legere and CMO Mike Sievert in particular. Hoettges called T-Mobile's "uncarrier" branding "one of the most impressive marketing stories I have ever seen," at least in telecommunications. "I am very lucky that I am part of this success here," he said.
While DT has clearly been looking for a way to exit the U.S. market the past few years, Hoettges' comments do not indicate that DT is looking to sell its stake anytime soon.
Recon Analytics analyst (and FierceWireless contributor) Roger Entner told Computerworld: "I don't think Deutsche Telekom will sell off shares, and right now T-Mobile is making a net profit," Entner said. "Only when Deutsche Telekom comes to the realization that nobody wants to buy T-Mobile, that will be a really bad sign."
- see this Computerworld article
- see this TMoNews article
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Correction, Jan. 21, 2015: This article incorrectly stated the size of Deutsche Telekom's ownership stake in T-Mobile US. It is 64 percent, not 66 percent.