10/15/2008 3:08:00 PM
Where is T-Mobile's edge?
Outsourcing a third of the finance division and removing 100 jobs might sound like the behaviour of a company on the ropes, but, in T-Mobile’s case this week, it is quite sensible. There is a need to stabilise the cost base and then switch the business to make the brand and propositions compelling.
Things have always been difficult for T-Mobile UK as the number four network – the operator with vastly smaller resources. T-Mobile has Virgin as the most successful MVNO in the UK and is one half of a successful network share programme with 3. But commercially, T-Mobile has gone off the boil. Its inconsistent appetite continues to frustrate channel partners as well as its own customers looking to upgrade.
Fingers are crossed that it won’t run out of cash as it has in previous Q4s. But it is with its propositions that things have been most insipid and frankly disappointing. T-Mobile should have taken a lead on mobile broadband after a superb piece of branding on Web N Walk, but that looks to have been blown through indecision and caution. 3, Vodafone, Orange and now Virgin Media have leapt into the market.
The Solo and Combi tariffs seem to have been launched as half-heartedly as U-Fix and MyFaves. All four are good ideas that lacked the momentum, investment and belief to make an impact. It has tried to claim the territory of being the value operator but even its price guarantee fell flat because it was, in fact, not as cheap as 3.
The costcutting comes at the right time. UK MD Jim Hyde needs to make his business as lean as possible amid the current economic climate and get it to stand out and start growing.