BEIJING, May 31 -- Deutsche Telekom AG's T-Mobile International AG wireless unit sees "no strategic need" to make acquisitions in the United States after Sprint Corp and Cingular Wireless LLC bought rivals, T-Mobile USA Chief Executive Robert Dotson said.

    T-Mobile, the fourth-biggest US wireless company, has stood by in the past year as Cingular purchased AT&T Wireless Services Inc and Sprint agreed to buy Nextel Communications Inc for about US$35 billion. Deutsche Telekom bought T-Mobile, formerly known as VoiceStream Wireless Corp, for the same amount in 2001.

    "The population in the US can support a No 4 company," Dotson told journalists at T-Mobile USA's headquarters in Seattle on May 26. "We will be at the bottom of cost structures of any other wireless carriers in the foreseeable future."

    T-Mobile USA, which says its costs to acquire a new customer are as much as 29 per cent lower than a combined Sprint-Nextel, plans to spend 2.2 billion euros (US$2.8 billion) this year to expand and improve its own networks and has earmarked another 2 billion euros to buy additional radio frequencies. Deutsche Telekom said this month it spent US$256 million to buy 36 US permits in a government auction. The company also paid 1.9 billion euros in January for Cingular's networks in California and Nevada.

    T-Mobile USA plans to target groups including Hispanics, younger people and professionals as it expects to add fewer subscribers this year than the 4.2 million customers it won in 2004. The division had 18.3 million customers at the end of March.

    In the first quarter, T-Mobile USA added 957,000 customers, or 66 per cent of all of T-Mobile International's new clients. Deutsche Telekom, Europe's largest phone company, is increasingly relying on T-Mobile USA as sales from fixed-line phone calls, the former monopoly's biggest source of revenue, drop and German wireless usage stagnates.

¡¡¡¡Lower costs

    The US unit has been able to keep its costs lower by sharing marketing and development with T-Mobile International, which also operates in Austria, the United Kingdom, the Netherlands and eastern Europe, Dotson said.

    "We piggyback on the technology innovations in Europe and with 75 million customers in total we have economies of scale," Dotson said.

    Costs per gross acquisition, or the money a mobile phone company has to spend to attract a new client, were US$323 at T-Mobile USA last year compared to about US$344 at Cingular, US$349 at Verizon and as much as US$455 at Sprint-Nextel, according to data distributed by T-Mobile.

    Acquisitions currently are not on T-Mobile USA's list of priorities as roaming rates have decreased from about 76 US cents a minute to 10 US cents a minute in the past seven years, Dotson said.

    "There's not a lot of incentive to acquire companies because of low roaming rates," he said.

    Deutsche Telekom expects sales at T-Mobile USA will rise to 11.1 billion euros this year compared to 9.2 billion euros at T-Mobile Germany and a total of 9 billion euros from other regions.

    Sales growth

    To boost sales and retain customers, T-Mobile USA started personal area coverage checks, which enable potential clients to look up their area codes and see if T-Mobile provides adequate coverage in their home, office and commuter routes.

    The company also seeks to turn users of traditional phones into exclusive wireless customers. T-Mobile does not have its own fixed-line network in the US so, unlike rivals, it would not risk losing customers in another part of its business, Dotson said.

    T-Mobile also wants to attract younger users with integrated voice and data devices, including its Sidekick phone, which has a mini keyboard for sending email. Data integrated devices, such as Blackberrys made by Research in Motion Ltd, helped add 800,000 clients to net subscriber additions in the first quarter.

    First quarter sales at T-Mobile USA jumped 27 per cent, compared to 7.6 per cent growth at T-Mobile International and a 2.2 per cent decline at T-Mobile Germany. T-Mobile generated more revenue in the US than in Germany for the first time in the second quarter of 2004.

    "Deutsche Telekom is largely influenced by our success in the US," said Rene Obermann, CEO of T-Mobile International, at the headquarters.

    (Source: China Daily by Nadja Brandt & Kenneth Wong)