T-Mobile USA Gets New CEO: Here's What He Needs to Do


T-Mobile USA President and CEO Robert Dotson will leave the nation’s fourth-largest carrier as of May 2011 and will be replaced by Philipp Humm, who was the former CEO of T-Mobile Deutschland. Dotson has been at the helm of T-Mobile USA, which is owned by Deutsche Telekom (s dt), for the last 15 years. However, as the mobile market shifts to higher-powered devices that consume a lot of data, T-Mobile has faltered with late network upgrades and a recent quarter that showed off weakness in its once-strong prepaid offering.

Humm will take over as CEO of T-Mobile USA in February 2011, while Dotson will remain on as a non-executive board member until May of that year. But as the mobile market in the U.S. deals with the fact that most Americans already own a cell phone and that growth now has to come from machine-to-machine services and stealing customers away from the competition, things could get rough. As the new head of the smallest player in the space, here are a few things Humm will need to keep an eye on:

Transition to LTE: T-Mobile may say its rollout of HSPA+ technology across its network will offer “4G speeds,” and for the next two years or so it might, but T-Mobile can’t rest on smartphones during that time without preparing for the delivery of data. LTE is a key component of such delivery, as it not only has the potential for faster speeds but is a more efficient user of spectrum, which means it will boost T-Mobile’s capacity.

Spectrum: T-Mobile USA’s spectrum holdings limit where it can expand and how much capacity it will have for tomorrow’s bandwidth-sucking applications. The availability of 60 MHz of AWS spectrum, which will be auctioned off next year, would help, as would a deal with another player like Clearwire (s clwr), which may be shopping its spectrum around.

Prepaid: T-Mobile had its lunch handed to it during the first quarter, when its prepaid net adds drop by 92 percent. More competitors are entering the prepaid market and prices are falling rapidly as those providers compete for market share. T-Mobile either has to cut costs to the bone so it can offer rock-bottom prices or differentiate (GigaOM Pro sub req’d) so subscribers will pay more for its service.

M2M: AT&T (s T), Verizon (s vz), and even Sprint (s s) have efforts to sell their underlying network capacity to makers of gadgets and appliances. T-Mobile is no exception, although it has been quieter than the others. However, it has an agreement with Echelon to supply network capacity for smart grid services, and has also offered up its network for other devices, but it’s smaller coverage area makes it a hard sell.

So as Humm takes over T-Mobile USA the problems of stalled growth and a saturated market may be familiar to him from his time running the T-Mobile cellular network in Germany. But he will have his work cut out for him.


Richard Bennett

I never cease to be amazed at how confused people are about LTE. LTE is not a radio technology, so it has no advantage over non-LTE systems in terms of spectral efficiency. LTE is a change in the system architecture of mobile networks to bring IP closer to the user.

Now it happens that LTE as currently bundled has a more advanced radio than 3G HSPA, but as the HSPA+ announcements indicate, this radio can be deployed in non-LTE systems as well.

LTE is about IP, not about a better radio.


It is about time. Under his leadership t-mobile has made all of the wrong decisions; from not rolling out 3g fast enough, to not expanding coverage areas after numerous customer complaints. They were slow to bring in newer handsets and did not plan ahead in their spectrum purchases. Instead of addressing their problems and dealing directly with them they came up with silly marketing redirects to appease the customer. I am glad he is going and maybe someone can move this company forward can take over.


Two quick observations:

  1. I have some friends in New York that have tried T-Mobile’s HSPA+ service. Their results: slower than the 3G service it replaces. Not a good sign.

  2. A major hole in T-Mobile’s pre-paid service when compared to AT&T’s: no pre-paid data equivalent to MediaNet. I recently stopped using T-Mobile’s ToGo in favor of At&T’s GoPhone for that very reason, even though ToGo is slightly cheaper for voice (no $1/day charge on days it’s used.) T-Mobile could drop ToGo prices drastically and still not attract customers unless they offer a pay-go data option.


If anyone becomes the second iphone carrier, I hope that it’s T-Mobile and not Verizon. At least T-Mobile has decent rates and quality customer service. Around here they also have good coverage too.


Humm is a quite capable guy…

I dealt with Telco’s in Germany for a while and when he was at the helm of TMO-DE he did a great job of fending off Vodafone and O2 in the market and working with MVNO’s and other device users (appliance/services customers, etc) to get them to use TMO.

He was pretty adamant that TMO-DE needed to be at the fore front of device selection. We can expect to see some cleaning of the house when he is on board. AT&T and Verizon have a very Europe and APAC centric view of the business when it comes to handset selection; TMO US’s handsets were generally always “blah”… I will see this changing.

On to prepay; the US has NEVER had a Europe style prepay system. This may be a way to cut the ties and do a Europe still prepay. Prepay in Europe doesn’t mean credit issues, it means I don’t want a surprise bill, Data usage, roaming in region, intl calls, etc, ALL are not a rip off in prepay in Europe. I would expect them to clean house on this.

In regards to LTE: It’s obvious it will happen; spectrum being the key item here. I’ll put my telco hat back on. UMTS/3G; took about 10 years to propagate to a fully developed/tested/debugged level that a WIDE array of equipment suppliers supported it. With just a few suppliers on LTE T-Mobile US would be NUTS to deploy now. They are right to wait, but they should still “announce” it (e.g. state; June 2011; we will begin early LTE deployments) – no one says they need to go live nationwide out of the shoot… But let AT&T, Verizon and other carrier debug the nastiness and wait till a wider variety of infrastructure vendors are online. It can in some cases drop deployment costs 30-50%, which means less higher rates to payback the capital costs.

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