T-Mobile USA says it will have a new CEO next year. But will that long-rumored merger with Sprint Nextel Corp. materialize first?
On Wednesday, Deutsche Telekom-owned T-Mobile USA said Robert Dotson will resign in May 2011, to be replaced by Phillip Humm. Humm ran T-Mobile’s Germany operations until late 2008; he’s also the executive credited for bringing the Apple iPhone to Germany in 2007.
In a prepared statement, Dotson, who’s led T-Mobile USA for the past 15 years, said he long has intended “to step away from the business at this stage in my life in order to devote more time to family and to take on entirely new and unique challenges.” Dotson and Humm will work together over the next year to “enable a seamless leadership transition,” Dotson said.
The change comes as T-Mobile USA’s prepaid unit reported a 92 percent drop in first-quarter subscribers and as rivals roll out more popular smartphones. T-Mobile USA further is lagging behind competitors in terms of 4G rollout plans. All in all, the CEO switch raises the question of whether T-Mobile USA-Sprint merger talk once again will ripple through the industry.
To be sure, such a union could prove smart. Sprint Nextel has become an impressive player in the prepaid sector, thanks to the acquisition of Virgin Mobile USA. And, the wireless carrier, the third-largest in the United States, is stemming churn with attractive voice and data plans, and improved customer service. On top of that, Sprint is pursuing an important beyond-the-consumer strategy: offering machine-to-machine (M2M) communications. Companies including Sprint and Verizon Communications Inc. work with utilities, for example, to power smart meters. M2M applies, too, to e-readers and in-vehicle systems connected to the Internet.
M2M represents a lucrative market, and it’s one that would give T-Mobile USA a much-needed new line of growth. In addition, Sprint boasts a 4G network thanks to its partnership with Clearwire Corp. T-Mobile USA has limited 4G plans. Combining the two carriers – a move communications insiders have speculated about several times in the past few years – could create a formidable foe to giants AT&T Inc. and Verizon.
For now, T-Mobile USA’s public plan is to put Humm in Dotson’s seat. But it seems reasonable to expect that the intervening year will include revived discussion of – and possible movement toward – a T-Mobile USA-Sprint transaction.
