3GSM Congress: T-Mobile Strategy Presentation

17th February , 2005 ( see below for all today's 3G news )

Europe : In its keynote presentation at the 3GSM Congress in Cannes, T-Mobile called for a new approach to the challenges and opportunities facing mobile; pressed for changes to the subsidy model and approach to tariffs; called for a reduction of roaming rates; gave further details of its broadband mobile strategy and its strengthened lead in Wi-Fi; announced new mobile data devices and tariffs; and called for the industry to align on the growing needs for interoperability and standardisation.

The myth of mobile maturity: T-Mobile denounced the notion of maturity, even in voice services. Global mobile users are forecast to double from 1 billion at Cannes last year to 2 billion by end 2005. US customer growth was around 14% last year. (T-Mobile USA customers increased 32%). In European countries, penetration is moving beyond 100%. More important, uses and usage of mobile are immature everywhere, and mobile is just now entering the broadband revolution.

“We need to ban the word maturity from the mobile dictionary; but we also need to adopt a new approach to mobile growth”, said René Obermann, Chief Executive of T-Mobile.

Change the subsidy model. Change tariff structures. The need for fairness and simplicity: The focus of mobile has to shift firmly to encouraging new uses and new usage, and to building customer loyalty and customer lifetime value. To do this, mobile should become simpler. Tariffs should be fairer. Pre-pay subsidy should go. Roaming rates should be simpler and more attractive.

“Subsidy drove penetration. Now pre-pay subsidy is subsidising low cost competitors. And it’s making tariffs too high.

“We are at the crossroads between device cost and usage cost. Drop subsidy and we can cut tariffs. Customers want lower tariffs. They drive usage and loyalty. Pre-pay subsidy needs to be cut, then removed.

“Roaming rates today are still perceived by customers as a usage barrier. Last year, T-Mobile cut the cost of holiday roaming by up to half. We will extend our leading position with simple, fair transparent and attractive offers. The whole industry should support this path into the future and should act now.” said René Obermann.

“Internet in your Pocket.” “Office in your Pocket.”: T-Mobile gave further details of its broadband mobile strategy to deliver the internet to customers, estimating 1 in 5 Western European workers are already mobile, and citing Analysys’ forecast of total Western European mobile business data being worth some €1 billion a year by 2009.

Hamid Akhavan, Chief Technology Officer of T-Mobile said: “Now there is no reason why our access to the office information and company IT infrastructure should be less while on the road. Plus, the convenience of having the Internet in our pockets will have a bigger positive impact on our lives than the internet itself has had to date.

“We as an industry pack more and more features into our phones and launch more and more services. The problem is most customers don’t know how to use the features and in many cases are not even aware of the services.

“Our approach is simple. Open internet access. Worry free tariffs. Devices that customers can instantly use, because they’re already familiar with the operating system - they already use it on their PCs.

“While mobile voice will remain the “killer application,” our customers will adopt our mobile data offer for its “killer experience” – it will offer our customers the same experience as a good DSL connection they enjoy at home or office, for all their favorite data needs - e-mail, messaging, real-time multimedia, browsing and downloading.”

2.5G, 3G, Wi-Fi. Integrated network strategy: “3G will become the work-horse technology of mobile, just as GSM is today. The customers will migrate to 3G over time, as they did with analogue to digital voice. We will enhance its speed significantly with HSDPA,” said Hamid.

“The pace of adoption will grow rapidly. We are planning to double our sales of data-centric devices and cards in Europe this year, compared to 210,000 last year.”

“Usage is growing rapidly - 10 terabytes of Wi-Fi data in T-Mobile US this January alone. This is the equivalent to half of the 24 million volumes of books, photographs, recordings and other information available at the United States’ Library of Congress, the largest library in the world.

And we are extending beyond airports, hotels, destination spots to trains - with the introduction of Wi-Fi on trains in the UK.”

The need for a new approach: “Mobile is changing and T-Mobile is changing,” said René Obermann. “Through our Save for Growth programme, we are simplifying our structure and processes; sharpening our focus; improving our quality and speed to market; and aiming to increase our operating investment in growth by €500 million a year by the end of 2006. We will gain competitive advantage.

“We’re committed to a new approach to mobile both in the voice and the broadband worlds.”

World’s first 2.5G, 3G and Wi-Fi mobile device: T- Mobile presented a range of data devices and tariffs, including the world’s first pocket-size MDA combining 2.5G, 3G and Wi-Fi; large, high resolution screen; integrated Qwerty keyboard; video telephony and conferencing; Pocket Word, Excel, Outlook, Internet Explorer; Bluetooth and infrared; send and receive faxes; voice activated phone dialling.


Among the data tariffs T-Mobile presented were:

“All you can mail” Germany. €15 per month for 2,500 e-mails, 5MB data. €35 per month for 1,500 e-mails, 3MB data, roaming anywhere in the world.

All you can eat Wi-Fi UK. £20 per month + VAT..

The Click: Boom experience: Hamid Akhavan said: “Our aim is simple. Always-on, always-available internet access with the fastest possible response time. The speed you need to match the killer experience of a fixed broadband connection with wide-area mobility, enabling you to work the way you do at the office. Minimum clicks. We call that our Click-Boom Experience.”

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