HomeInsightsT-Mobile to save a billion a year

    T-Mobile to save a billion a year


    T-Mobile has mirrored Vodafone’s One Vodafone project, whereby the operator hopes to make a billion in savings by closer network integration  technical development and increased buying power, by announcing  its “Save for Growth” plan.

    T-Mobile seems to have hit on a similar number for operational costs, around EUR1 billion a year, which it says is about 10% of its current operating cost, by the end of 2006.
    The headline news of the announcement is that the operator is expecting there to be around 2,200 jobs cut across Europe, with around 1,200 going in Germany. The operator also plans to save EUR500 million by “optimised management of handset subsidies, which sounds like management speak for “fewer, more targeted, subsidies”,  and save EUR50 million by introducing more focussed service portfolios. The operator will also seek to improve its procurement processes, extracting EUR250 million savings, and reduce overheads by EUR50 million.
    Timotheus Hoettges, Member of the Board for European sales and service activities and responsible for the “Save for Growth” programme said there would be a shift of approach in handset procurement. “In the past, we have placed emphasis on a very large range of models, though only a portion of these met with significant customer response. In the future, we will match our range more strongly to our customers’ actual needs and narrow the range. We will place a stronger focus on selected T-Mobile specific devices that deliver real competitive advantage.”
     As an example, he cited the MDA family of devices. Overall, T-Mobile plans to reduce its terminal range to between 30-40 models from its current more than 50. It seems it will follow the trend for more ODM devices tailored specifically for its needs.