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Retail Top 100 2012, No. 70: T-Mobile

June 19, 2012

T-Mobile's 33.6 million customers may be relieved that the federal government blocked AT&T's bid to buy the No. 4 wireless carrier so they can keep their wireless service plans. But in the long run, T-Mobile is in an unsustainable position. Analysts say the company's past decisions have painted it into a corner where it is being squeezed by com-petitors on both sides. On the high end, it can't compete with Verizon Wireless and AT&T. At the low end, T-Mobile is struggling against competitors Sprint Nextel Corp., which sells government-subsidized "lifeline" service, and Me-troPCS Holdings Corp., which targets urban, working class consumers with cheap "unlimited" plans. "We're stuck in the middle from a brand point of view," says T-Mobile CEO Philipp Humm. Essentially, T-Mobile is seen as a cheap brand by those who can afford better, and an expensive buy for those who must pinch every penny. That leaves the most valuable customers, the ones who buy smartphones and sign up for two-year contracts with lucrative data plans. They're the ones racing for the exit.

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