July 7, 2009 | by Andrew Kameka
T-Mobile UK, struggling to improve performance in the British market, could find itself under new ownership next year. T-Mo UK is under heat from parent company Deustche Telekom to gain market share, and if the numbers don’t improve, recent reports suggest that the division may be sold to O2, Vodafone, or another suitor.
Mobile News reported three weeks ago that T-Mobile UK’s poor performance under previous management has caused some to suggest that the unit be sold to another company. The Guardian recently suggested that leading British carrier O2 is considering purchasing T-Mobile UK.
Deutsche Telekom cited the UK division’s struggles as a major contributor to an April warning about lower-than-expected profit margins. CEO Rene Obermann even announced that the company would spend less on administration, advertising, and technology in the UK.
Despite reportedly strong sales figures from the G1 and other devices, T-Mobile hasn’t made much headway in the ultra-competitive British market. The company gained 53,000 new contracts in 2008 but remains in fourth place behind O2, Vodafone, and Orange.
A T-Mobile UK sale would be good news/bad news for Android fans. Joining the Vodafone or O2 network could open up doors to Android phones exclusive to either carrier, but it would reduce competition between carriers and reduce the number of deals available for switching. Rate plans could also be affected.
Things look bleak but a sale of T-Mobile is not imminent. Deustche Telekom CEO Obermann stresses that recently-installed Managing Director Richard Moat needs more time to right the ship. Further complicating matters: analysts say T-Mobile UK has lost customers over the past 9 months and Virgin Mobile’s 4 million-customer-strong partnership with T-Mobile UK can be terminated if the company is sold. Any buyer would have obvious concerns.