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Telekom changed the U.S. strategy

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NEW YORK / FRANKFURT. The new head of T-Mobile USA wants the ailing mobile phone subsidiary of Deutsche Telekom with a savings program and a new strategy later this year back on the growth path. Philipp Humm presented yesterday – after about six months in office – in front of his new strategy, highly reminiscent of the concept of the German mobile radio operator E-Plus.

The 2005 has shaken up the smallest provider to the German mobile market with cheap prices and it is through sales partnerships with, among other things Aldi as well as target group offers such as a charge for a long time Turks grew faster than the market. By well-targeted investments in its own network, he has also blossomed into one of the most profitable provider.

Humm’s concept shows clear parallels to this: The 50-year-old announced data packets for the mobile Internet surfing, which are much cheaper than the competition. He is also planning special rates for Spanish-speaking customers in the U.S. and other distribution partnerships. Last year, T-Mobile USA has already won the Wal-Mart as a partner. By building an even faster network Deutsche Telekom wants to wait until enough phones on the market that work well in this network.

The Deutsche Telekom has been trying for two years to push its U.S. subsidiary again. She lost since 2009, strong cash-paid, operating profit (EBITDA) is decreasing.

Humm’s strategy is to ensure that sales by 2014 to three billion dollars (2.2 billion €) is increasing – that would be up by around 14 percent compared to 15.5 billion euros in 2009. He wants to lower the cost to 2013 by one billion dollars. With savings programs he knows about – Humm was previously a few years head of the German mobile arm of Telekom. The Group has implemented the first in a savings plan.

The U.S. is Germany’s most important market for telecoms. T-Mobile USA contributes a quarter of revenue and one-fifth of operating profit (Ebitda) of the entire group. The ratio shows not only the great contribution of U.S. subsidiary. It also shows that the yield is poor in the U.S. than in the entire group.

That should change: Humm plans to increase the EBITDA margin from the current 29 percent by 2015 to a value in the middle between 30 and 40 percent. This, however, it falls short of targets previously issued. It’s said that will reach even 2012, the U.S. subsidiary 35 percent Ebitda margin. "This is for two years pushed to the back and become even more vague," said Wolfgang Specht from WestLB. He maintains the strategy in principle is not yet mature. Another analyst called it "boring as expected.

The analysts expect that the Telekom wants to buy time to explore other options for a partnership in the United States. Even if they wait to build the super-fast network still want: long-term it is looking for a partner with whom they can share the high investment.

In New York Humm insured together with Deutsche Telekom CEO Rene Obermann, T-Mobile USA is fundamentally strong enough to finance itself. To strengthen the financial strength, could be sold under other antenna sites in the United States. This was intended as a signal to investors that are not permanently money from Bonn in the U.S. business must flow.

Obermann accompanied the U.S. strategy at length, as Humm last year gave his inaugural speech to the employees at the company headquarters in Seattle, flew to the CEO in order to convince people that he really gets into the boat. Humm is the first German who heads the U.S. subsidiary.