t-mobile legere

While T-Mobile and its UnCarrier strategy are great for customers like you and me, apparently it’s not the best for business.

Tim Hoetthes, CEO of T-Mobile US’ parent company Deutsche Telekom, said in an interview with Recode the company’s current path is unsustainable and something needs to change. 

Currently $4 billion to $5 billion per year is being needed to keep T-Mobile afloat, due to the companies great, no-contract plans for customers. It’s exactly what the wireless industry needs, however it’s lead to five of the last six quarters the company has lost money.

“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.”

That’s why, Hoettges said, T-Mobile and Sprint would have been the perfect combination to be the ‘super-maverick’ in the US market. However, the US government didn’t think so and wouldn’t allow the third and fourth-largest carriers to merge.

Deutsche Telekom is not bullish on the future of its T-Mobile division in the US unless it can merge with another company to have more of a financial backbone. Deutsche Telekom hasn’t always had the most support for the company, wanting to offload T-Mobile to focus on its German properties.

“We have done what we had to do,”Hoettges explained to Recode. “We had built an infrastructure and this infrastructure had to get utilized and we did that with very aggressive promotions.”

T-Mobile, with CEO John Legere leading the way, has been trying to reshape the wireless industry by ending two-year contracts, and adding plans to allow customers to upgrade phones when they’d like, unlimited data, messages, and voice, and free data roaming in worldwide.

Its strategy has lead to great subscriber growth, just not the earnings numbers T-Mobile’s parent company wants to see.

Source: Recode via Gizmodo

  • Must be planing on going out with a bang.

  • James G

    Disheartening news. A company gives consumers what they want and deserve and isn’t being rewarded for it.

    Screw AT&T&VZW

  • singhay559

    Couldve just merge with att

    • Marcus

      Same here. Honestly, I’d use T-Mobile, but I prefer to have better coverage over a better plan. I have an AT&T Mobile Share Plan with my Dad and brother; we all share unlimited talk, text, and 10GB of data per month.

      • Jerry

        I left att to go to T-Mobile and I haven’t regretted it. Now with all the wifi calling and Internet being everywhere this is deff the right move T-Mobile. I’m sure Steve Jobs would be very proud of what tmobile is doing because that’s the vision he had for the mobile phone. Remember how long it took AT&T to enable the iPhone to send MMS Messages? Because supposedly they had to modify things for it to work. Bottom line att and Verizon are greedy and tmobile is doing a awesome job at changing the industry finally.

    • Antzboogie

      Sorry in New York I get home network speeds. Verizon is such a ripoff it’s amazing. They used to try to charge me 120 for one line yeah right. No simultaneous voice and data until recently. T-Mobile please survive no one wants these companies who rip us off anymore.

      • singhay559

        I agree. All cell phone company are greedy bastards. So far only tmobile has change the game. Unfortanetly i travel for a living so i need reliable cellular connection. I also have unlimited data with att and i dont wana loose that either.

      • My Unlimited Plan with AT&T is the only reason I don’t plan to ever leave.
        I still cringe though that anytime I go to a concert, sporting event, etc. that AT&T still can’t handle the onslaught.
        I don’t want to hear “the towers were overloaded”, I attended Bonnaroo 2007 sponsored by AT&T, by the first night I had no service all weekend. Verizon users? Not one problem at all!
        This is a big issue considering when you are at an event like that, you need your cellphone for getting a hold of someone to meet up, to use data for directions, etc. All those essential features become completely worthless when your iPhone becomes an iPod…

      • Nathan

        CDMA networks haven’t been able to use both voice and data simultaneously for a while now. It’s a hardware limitation.

      • Rowan09

        They can now with LTE on Verizon.

  • Vince Reedy

    I believe this will change when their network improves like they said it would this year. They have to have these great deals and promotions to keep subscriptions up. It’s called a loss leader. I would bet the news is different a year from now if they do what they’ve been promising.

  • Kieve

    Lol. I said this just the other day. I was like its cool but how the hell are they able to do this stuff? The other companies are bigger than them and they don’t do it yet t-mobile can do it? Didn’t make any sense and now i know why.

    • JTN07

      I’m sure the other, bigger companies are more than capable of doing whatever T-Mobile has been doing. However, they will not because they want to maximize profits; they probably want to give customers limited services and benefits but for a high price, like they have been for the past decade.

      • Jerry

        Exactly

    • Rowan09

      To be honest they aren’t doing anything that special besides giving unlimited data and international data and text. If they were offering MeteoPCS prices then that would be awesome. I’m paying almost $100 a month for unlimited everything with t-mobile. I hope they stay around just because of the unlimited data which is just as fast as AT&T.

      • la79

        Yes. I guess unlimited data and international data and text is not “special.” You must be kidding.

      • Rowan09

        Sprint and MetroPcS t-mobile offers unlimited data. International data and texting is great, but anyone that says t-mobile is cheap they are not really cheap at all. If I’m paying $100 for unlimited everything when I can get it for $60 plus tax from Metro, t-mobile is a bit expensive just that they are cheaper than the Big 2 and data is faster than Sprint.

      • coLin

        the data is not faster. it all depends on the coverage (how close you are from the tower). in the big cities all four carriers have very good LTE coverage. the question is: will you have good coverage if you travel to Nebraska or N/S Dakota? or other states you name it

      • Xee

        LTE (4G) in the US is slow! We have 4G+ (EE) here in the UK now which is up to 150Mbps

      • Cody

        Yeah dude, whenever the UK gets to be the size of the U.S. heck, even the size of the state of Texas and has good coverage, you come back here and talk to me about how good internet and coverage is.

      • coLin

        they are just finishing with 3G towers haha =))

      • Rowan09

        Sprint is notorious for slow data, the problem with Sprint was that they were working on Wi-Max while the industry was moving to LTE. I’ve been all over the South, live in the East and all over the West and Sprint’s LTE speeds are slow. I’ve never been to the Midwest so I don’t know how speeds are there. T-Moble gets around the same speeds as AT&T and they have the fastest LTE network (I get about 25/15 on average). Verizon has the best coverage but not the fastest LTE speeds.

      • Nebraska has horrible coverage with AT&T, that I know for sure. How you can’t cover an interstate as big as I-80 is beyond me.

      • Antzboogie

        You must be on a payment plan for your phone I’m getting 4 lines for 110 so you must be lost.

      • coLin

        he has international data as well

      • Rowan09

        Lost? You get 4 lines unlimited everything for $110? Please let me know how that’s even possible? I have a fully unlocked phone with no payment plan. When I say unlimited everything I mean no capped LTE, that plan alone is $80 without taxes.

      • therealjjohnson

        They just announced unlimited talk, text, and 2Gb of data with no contract for $40. Unlimited 2G/3G after the 2GB LTE. That is literally Metro PSC prices.

      • Rowan09

        I checked their website and the $40 plan is a simple starter plan with 500MB of data and it gets suspended after you reach 500MB. They also have a 2GB plan for $45 as well and data is suspended after 2GB. The other plans are $50 for unlimted data with 1GB of high speed. None of these plans includes taxes so they are more expensive than people think. I use about 7-10GB a month so not having unlimted high speed is not for me and that plan starts at $80

      • Eddy Castro

        Just signed up with T-Mobile, 3 lines, unlimted everything and we pay 47 dollars each. T-Mobile is the best right now.
        Luckily for me I live in LA so I get awesome coverage!

      • Rowan09

        Unlimted data but not LTE data. How much high speed data do they give each of you 1GB?

      • Eddy Castro

        Unlimited 4G lte data. It’s a promotion they are having right now. Unlimited 4g lte data family plan for two for 100$. Additional unlimited 4g lte 40$ per line.
        Trust, I wouldn’t be signing up for only 1 gig!

      • Rowan09

        I just seen the deal you were talking and I’m switching to it Monday with my wife, we’ll save about $60 a month since I’m paying $92 for the same plan and her $70 (job discount). I don’t know if this is sustainable but it’s their best deal by far, it’s even better than the $60 Metro plan since you get all the benefits plus international data and texting.

  • Tom

    they have the best prepaid plans

  • Dante Arellano

    Just ask for sone money to carlos slim

  • Antzboogie

    TMobile has to survive they have treated me so well. I took a dump on Verizon for them.

    • Joe Brunet

      The laws of physics can’t be broken; if one breaks them… boom cataclysm. It’s the same thing with T-Mobile; they keep investing and investing for this speedy growth but the company is loosing money. We are talking about billions, not millions OK. That’s the reason why Tim Hoetthes is complaining; this pace is simply not sustainable. The changes they make are good for the industry but not good for T-mobile’s own economy.

  • Antzboogie

    This is bad news or is it the parent company just acting like an angry parent Apple should buy T-Mobile.

    • Joe Brunet

      Why people keep thinking Apple is going to buy a carrier. Wake up! is not gonna happen, Apple is a product company. They have no interest in the telecom industry. They would have joined years ago when they started the iPhone. They had a lot of issues with AT&T in the early stages, but they didn’t purchase any carrier or network with spectrum whatsoever. They stuck with doing what they do best: Products.