Lagging T-Mobile USA Opts for New Strategy And CEO

T-Mobile USA, which is owned by Deutsch Telekom AG (XE: DTE), the fourth place mobile phone carrier in the US behind Verizon, AT&T and Sprint, has finally opted for change. Early today the company announced that long time CEO, Robert Dotson, will be stepping down in February of 2011. In his place, the company appointed Philipp Humm to be the CEO-designate as of July 1. He will officially take over the CEO slot on February 2011. T-Mobile has continued to lag its key rivals in the United States and for some time now has needed a new strategy. Humm was previously the CEO of T-Mobile Deutschland from 2005 to 2008 and is currently the CRO of sales and services for Europe for Deutsch Telekom. He is well respected, understand the company and will bring new ideas to the table.

It is about time T-Mobile got serious about its operations in the United States. The firm needs to be either acquired or come up with a new strategy to compete in the ever competitive wireless marketplace. The selection of Humm appears to make a great deal of sense. Currently, T-Mobile USA has falling subscriber numbers and increasingly poor service a combination for further problems. According to a story by Archibald Preushat for the Wall Street Journal T-Mobile USA,

… likely had the worst first quarter out of all the wireless players in terms of subscriber-base development. T-Mobile USA lost 118,000 contract customers, consistent with recent trends, but the number of net new prepaid customers fell 92% from the fourth quarter, a startling drop that shows the strength of some of the other prepaid players. Sprint Nextel, which continues to lose its more valuable customers, showed particular strength in its prepaid business.

We may see some changes before the official change over in February of next year. Investors must keep a close eye on all the upcoming management changes and possible strategy shifts. Stay tuned.

For more:

GigaOm

Recommended Reading - Examining the Impact of SEC Guidance Changes on CEO Succession Planning, The Conference Board

Edward Ferris and Justin O’Brien recently published a paper for the Conference Board (members only) entitled, Examining the Impact of SEC Guidance Changes on CEO Succession Planning. The paper is a must read for anyone interested in CEO succession and its implications for corporate governance and corporate performance. According to the report as a result of the recent change by the SEC,

… regulators have reframed CEO succession as a risk management issue and placed its responsibility firmly in the boardroom. Succession planning responsibilities are redefined as “a key board function” and “a significant policy (and governance) issue … so that a company is not adversely affected by a vacancy in leadership.”

… the implications seem clear: boards will have to set more specific standards and requirements for CEO succession, take responsibility for results, and exercise discernable independence in the process.

Against this backdrop, the report seeks to answer three questions:

• What is the likely impact of this policy reversal?

• How will it practically affect the board?

• What should shareholders know about CEO succession plans, and why?

I highly recommend anyone interested in the succession issue read the paper. If you are not a member of the Conference Board, you might want to contact one of the authors, Edward Ferris, at the Hedge Fund Solutions Research Center. His email is eferris@hedgerelations.com.

Nokia Awakens from Big Sleep - Is it too late?

Nokia NOK1V (Finland), the world’s largest maker of mobile phones, has for sometime now been lagging the big players in smartphones. Nokia’s Management has seemed to have been asleep at the wheel while Apple, RIM, even Motorola and Google have leapfrogged the firm with regard to smartphones. Finally after much consternation by investors and analysts, the firm just announced the appointment of Anssi Vanjoki, a longtime executive at the firm, and the company’s current marketing chief to serve as the new smartphone chief. The announcement along with other management related changes, some of which have occurred over the last year, continue to put the firm in a spotlight they would much rather avoid.

Nokia needs to get a fire under its design and production capabilities to compete with the other big players eating the firm’s lunch. The latest changes are expected to go into effect by July 1. Keep a close eye on Mr. Vanjoki as he takes on a truly challenging task that is vital to Nokia’s continued success.

More:

Bloomberg updated 5/12

US Cellular Selects Fast Food Marketing Exec As CEO

US Cellular USM (NYSE), the wireless voice and data service provider, announced the selection of Mary Dillon to be the firm’s new president and CEO. Ms. Dillon will succeed John Rooney who announced his planned retirement back in February. Ms. Dillon has been the EVP and Global Chief Marketing Officer of McDonalds since 2005. Her selection appears to be a terrific choice for CEO. She brings to the table the type of executive needed to help US Cellular compete in its market. She has both marketing and operational expertise. Ms. Dillon will take over the reigns of the firm on June 1. She faces real challenges to the company’s business but she has the skills to help the firm meet those challenges.

Rooney’s announcement back in February that he would be retiring raised concerns for the company. He had been instrumental in building the firm from a small company that collected roaming fees as its key source of revenue into a powerful regional carrier.

Keep a close eye on the transition and the business moves Dillon makes after she takes over the company.