8/12/2009 12:22:00 PM
What Moat will do at T-Mobile UK
If you want to know what to expect from Richard Moat at T-Mobile UK over the coming months or year, have a look at what he did when he was at Orange Denmark. Orange’s Danish business had a negative value when Moat joined in 2002, with France Telecom (FT) struggling to offload it because of its liabilities. FT faced the prospect of giving it away for nothing and underwriting the liabilities. It was costing Orange millions just to keep the business going.
After two years at the helm, Moat not only managed to find a buyer, but also secured £500m for FT who sold it to the incumbent, TeliaSonera. He saw it as a business that was loaded with extraneous fat, so he went about aggressively removing costs, cutting the workforce from 1,800 to 900. Nothing was sacred in Richard’s cost-cutting initiatives – no area remained unaffected and it was done brutally fast. There was a PowerPoint presentation with the details of the cost-cutting plans that were leaked at the time. It was entitled ‘Julegave’, meaning ‘Christmas present’ in Danish and it caused shockwaves, but those in the business valued its need to restore the company.
To characterise Richard as a butcher does him a massive disservice. He was more like a surgeon. Crucially, after his cost-cutting neither customers nor Orange’s partners would have experienced any change. The only person who did experience a change was the canteen lady, who was only cooking for half the workforce. There appears a similar vision for T-Mobile UK, and the comparisons don’t end there. The end result after the sale of Orange was that the five operators in the market were reduced to four.
I expect some difference in his approach at T-Mobile with a more aggressive stance on outsourcing and a greater appetite for MVNOs. UK operators have not been as MVNO friendly as he has seen in other markets, and he will jump on that. Expect major cuts to T-Mobile’s workforce, but expect precision. If you are a good employee, adding value to T-Mobile, you should welcome him – he will get the network in a stronger position and help safeguard your future. But there won’t be any hiding for people not contributing to the business. He will tell manufacturer and operator partners that he is happy to work with fewer of them and will be very focused on acquisition costs and lifetime value.