t-mobile

T-Mobile German owner claims US model is unsustainable

T-Mobile USA has been on the up-and-up in 2014, adding 8.4 million new customers to its service and generally being a nuisance to all other U.S. carriers with its low prices and incentives.

Its German owners still do not believe in CEO John Legere’s plan however, calling the current “Un-Carrier” model unsustainable, if Deutsche Telekom is to invest $4 to $6 billion per year on spectrum and advertising in the U.S.

The company simply isn’t making enough profit to warrant Deutsche Telekom’s commitment, even if 8.4 million new subscribers in one year is excellent for the fourth largest carrier.

Deutsche Telekom claims T-Mobile USA is still open for sale and hopes some other company takes it off its hands, after the Sprint acquisition fell through in mid-2014.

Legere responded to claims Un-Carrier was unsustainable with his usual gusto, calling the claims “bullshit”. He followed up by saying the owners know what they’re doing, and it was simply an error from Deutsche Telekom.

It is worrying to see so little interest from the German owners in regard to growth, especially since at the current rate T-Mobile might be able to compete with Verizon Wireless in 2018 (Verizon added only 5 million new subscribers).

The question is really in 2015 how well can T-Mobile perform. Will it be another excellent year, if will we start to see cracks on the formula, as T-Mobile runs out of ways for users to save on bills.

T-Mobile has been a force for good in the wireless industry, but Sprint is ready to undercut, AT&T has shown it can compete (in some areas) and Deutsche Telekom is not prepared to invest over Verizon and AT&T on spectrum.

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