8/6/2009 11:05:00 AM
Richard Moat brings in low-cost T-Mobile strategy
T-Mobile MD Richard Moat is putting the final touches to a plan to strengthen the company as a ‘value operator’.
The strategy is intended to reverse its plunging financial performance over the last two years.
Moat, who completes his first month at T-Mobile this week, will:
• Remove all contractors – he has already cut 100 staff not on fixed contracts.
• Push his direct reports to remove staff who are not reaching the objectives of their roles.
• Introduce a radical new model for handset purchasing.
• Set higher targets for T-Mobile’s direct stores.
All the changes aim to make the company more efficient and focus more clearly on the ‘value end’ of the market, according to several sources familiar with the situation.
Moat wants to drive down costs to ensure T-Mobile is able to offer deals its rivals can’t match.
One senior source said: ‘Richard has identified that T-Mobile can’t be all things to all people, so he will position it as a value operator and be very focused on the entire business delivering that.’
A more informal instruction from Moat is to take a tougher line on staff not meeting their targets, and reinforce the importance of quarterly reviews.
It is also believed that T-Mobile will have a considerably smaller range of handsets than its rivals in future, with several manufacturer sources claiming T-Mobile has told them that it has very limited interest in handsets over €220. T-Mobile has denied this specific element of the story.
The network is also talking to manufacturers about a new business model – where it auctions slots for its product range, and where it defers payment on handsets.
One senior executive at a big manufacturer said: ‘They are saying, “pay us if you want to keep the business”. I would prefer the strategic relationship I have with the other operators, but I understand the T-Mobile predicament.’
T-Mobile will begin to stock generic kit, rather than handsets customised for its network.
T-Mobile declined to comment.