James: T-Mobile strategy is urgent, but short-term

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The first point is that T-Mobile’s Richard Moat appears to have succeeded by cutting the fat and the vanities from within T-Mobile’s Hatfield operation.

Gone are the schemes and projects that could not deliver an immediate return on investment. He has taken layers out of the management team. It is leaner, fitter, nimbler.

And key management staff like Mark Duncan and John Fannon appear to have a new lease of life for it, able to put through initiatives for channels they see value in. It is refreshing.

And it has enabled T-Mobile to show the parts of the dealer market it wishes to work with respect. For its indirect channel is clearly delivering it good quality business in volume.

Why can’t all corporations be cleansed of unnecessary middle management, red tape and hair-brained schemes to free up cash for the go-getters and the money-makers?

Because, T-Mobile’s approach works only in the short term. It requires a costlier depth of resources, or a broader flow of cash, to stay at the front of a technology business; to invest in infrastructure and service, and to commit to the kinds of volumes that guarantee product exclusives.

Moat realises this. His profit margin game can only work in such a tight market so long as profits themselves increase and customer market share edges up over a longer period. Which is why Moat knows the Orange venture is the best option.

And it is why dealers must ask of their T-Mobile futures when the pair are integrating their businesses in 18 months, and defending a relative monopoly much sooner.

 

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