Moat’s ‘value plan’ could rattle the Big Three

Moat’s ‘value  plan’ could rattle the Big Three

New MD Richard Moat hadn’t even started his first day when the question of ‘Will he be the shortest serving MD at any UK operator?’ reached many industry wags’ lips.

As we reported when Moat joined, our information is that Deutsche Telekom has given him until the end of 2009 to start the turnaround, preferring to wait until the valuations improve before considering offloading the UK unit.

One month in, and Moat looks like he’s making an immediate impact with tough but necessary and radical decisions. Moat is evident in all areas of the business, having spent time in the call centres and stores, while also giving much greater transparency to his decisions than many in T-Mobile UK have been accustomed to.

Positioning the operator more clearly in the value space and extracting good returns for Deutsche Telekom will be harder than simply giving away cheap deals. He will have to make the company extremely efficient, and the word from those in the business is that he has the courage, conviction and experience to do so.

If T-Mobile does become successful for the price-conscious consumer, it will hasten the desire from O2, Vodafone and Orange to remove it from the UK market given the pressure Moat will put on his rivals’ prices. The Big Three will find it impossible to match Moat’s cost-cutting because they have broader segments to protect.

Orange and Vodafone have seen their revenues fall in the last quarter and even O2 looks to be slowing. But it’s difficult to feel too much sympathy, as the rate of decline is miniscule compared with most parts of UK PLC. GDP in the UK has dropped by 0.8% in the second quarter of the year, with the mobile operators still performing much better than companies from other sectors of similar scale.

Written by Mobile Today
Mobile Today

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