Strategic Management CaseT-Mobile US032.docx

Strategic Management Case
T-Mobile US
03/26/2017
Mba-599
Introduction
T-Mobile US, Inc. (NASDAQ: TMUS) is Based in Bellevue,
Washington. T-Mobile US is the third largest provider of
wireless voice, messaging and data communications services in
the United States. T-Mobile US was named after T-Mobile
Germany. T-Mobile US offers its services through its
subsidiaries such as GoSmart Mobile. T-Mobile US operates
two flagship brands, T-Mobile and MetroPCS. T-Mobile
acquired MetroPCS in a reverse takeover in 2013. T-Mobile
offers post-paid plans and MetroPCS offers pre-paid plans.

Deutsche Telekom is the majority shareholder of T-Mobile US,
owning 65% of the company. Deutsche Telekom is a German
based company. T-Mobile US sells mobile phones, tablets, and
wireless internet. T-Mobile US offers unlimited wireless voice,
messaging, and data communications. T-Mobile also offers
WIFI calling when overseas or if network is out of reach. This
technology allows customers to turn a WIFI connection to their
own towers. The company offers its services through its
advanced 4G LTE network to 71.5 million customers as of 2016.
T-Mobile is capable of reaching 308 million in their homes and
workplace. The company also offers global plans. T-Mobile US
customers can use their services in Canada and Mexico at no
extra charge. Customers can also use their phones in Europe
using Deutsche Telekom’s network. Customers can also use
their cellular devices in Puerto Rico and the U.S Virgin Islands.
T-mobile has about 55 million post-paid customers which make
up about 77% of its customers. MetroPCS has about 16 million
pre-paid customers. T-Mobile also sells service wholesale,
including to Google's Project Fi- program, adding another
373,000 customers in the quarter. Between T-Mobile and
MetroPCS, T-Mobile US operates about 8000 stores. Most of
the stores are authorized vendors and the rest are company
owned. According to Fortune.com, Approximately 230 million
people live within 10 miles of T-Mobile's (tmus, +1.66%)
roughly 3,600 current stores. The company reaches 98% of
Americans. T-Mobile US has about 50000 employees. The CEO
of the company is John Ledger. He is known to be an outspoken
leader and does not fit the mold of a typical CEO. According to
CNNMoney.com, Consumer Reports named T-Mobile the
number one American wireless carrier and in 2017, T-Mobile
was ranked number one in Customer Service Satisfaction by
Nielsen.
T-Mobile US started as VoiceStream Wireless PCS which was a
subsidiary of Western Wireless Corporation. VoiceStream
Wireless was purchased by Deutsche Telekom in 2001 for $35
billion and renamed T-Mobile USA, Inc. Deutsche Telekom

completed the acquisition of VoiceStream Wireless Inc. for $35
billion and Southern US regional GSM network operator
Powertel, Inc for $24 billion. In 2013, T-Mobile US, Inc. was
formed through the business combination between T-Mobile
USA and MetroPCS Communications, Inc. The business
combination was accounted for as a reverse acquisition with T-
Mobile USA as the accounting acquirer. Accordingly,
T-Mobile USA’s historical financial statements became the
historical financial statements of the combined company. On
March 20, 2011, DT accepted a $39 billion stock and cash
purchase offer from AT&T for the company. The acquisition
was subject to regulatory approvals,
a reverse breakup fee in certain circumstances, and customary
regulatory and closing conditions. On August 31, 2011, the
United States Department of Justice sued to block AT&T's
merger with T-Mobile on the grounds that it would
"substantially lessen competition" in the wireless market.
Further reports indicated that the FCC would likely oppose the
merger. In December 2013, multiple reports indicated that
Sprint Inc, and its parent company Softbank were working
towards a deal to acquire a majority stake in T-Mobile for at
least US$20 billion. On August 4, 2014, Bloomberg reported
that Sprint had abandoned its bid to acquire T-Mobile,
considering the unlikelihood that such a deal would be approved
by the U.S. government and its regulators. On February 17,
2017, it was reported by Reuters that Softbank was considering
selling its majority share in Sprint to Deutsche Telekom (an
effective reversal of the original deal), citing struggling growth
in the U.S. market, and a higher likelihood that the deal would
be approved by the new administration. T-Mobile US has many
competitors. Its main competitors are Verizon wireless, AT&T,
and Sprint. According to Forbes.com, if the company continues
on its current trajectory in 2016, it might be time for big
competitors like Verizon and AT&T to start worrying. T-Mobile
US is redefining the way consumers and businesses buy wireless
services through leading product and service innovation. The

Company's advanced nationwide 4G LTE network delivers
outstanding wireless experiences to 71.1 million customers who
are unwilling to compromise on quality and value. T-mobile US
introduced a set of low-price leasing plans and unlimited plans.
T-Mobile launched its highly lauded “Binge On” feature, which
enables users to stream video onto their mobile devices without
it counting against their data plans. According to T-Mobile 10-
K Form, The wireless telecommunications industry is highly
competitive. We are the third largest provider of postpaid
service plans and the largest provider of prepaid service plans
in the U.S. as measured by customers. Our competitors include
other national carriers, such as AT&T Inc. (“AT&T”), Verizon
Communications, Inc. (“Verizon”) and Sprint Corporation.
AT&T and Verizon are significantly larger than us and may
enjoy greater resources and scale advantages as compared to us.
In addition, our competitors include numerous smaller regional
carriers, existing MVNOs, such as TracFone Wireless, Inc., and
future MVNOs, such as Comcast Corporation and Charter
Communications, Inc., many of which offer or plan to offer no-
contract, prepaid service plans. Competitors also include
providers who offer similar communication services, such as
voice and messaging, using alternative technologies or services.
Competitive factors within the wireless telecommunications
industry include pricing, market saturation, service and product
offerings, customer experience, network investment and quality,
development and deployment of technologies, availability of
additional spectrum licenses and regulatory changes. Some
competitors have shown a willingness to use aggressive pricing
as a source of differentiation. Other competitors have sought to
add ancillary services, like mobile video, to enhance their
offerings.
External Factor Evaluation
Key External Factors Opportunities
Weight
Rating

Weighted Score
WIFI Calling and Texting
20%
4
.8
International Services
10%
3
.3
Growth in Data Use
18%
4
.72
Internet Speed
20%
4
.8
Key External Factors Threats
Weight
Rating Score
Weighted Score
Government Regulations
8%
2
.16
Intense Competition
10%
3
.3
Availability of Spectrum
14%
4

.56
Total Weighted Score
100%
3.64
Competitive Profile Matrix
T-Mobile
Verizon
AT&T
Weight
Rating
Wt’d Score
Rating
Wt’d Score
Rating
Wt’d Score
Subscribers
16%
2
.32
4
.64
3
.48
Brand Name
9%
4
.36
3
.27
3
.27

Saturated Market
11%
3
.33
4
.44
4
.44
Market Share
18%
4
.72
3
.54
3
.54
4G LTE Coverage
19%
4
.76
4
.76
3
.57
Churn Rate
14%
3
.42
3
.42
1
.14
ARPU
13%
4
.52

3
.39
4
.52
Total
100%
3.43
3.46
2.96
Analysis
External Factors Analysis
T-Mobile Us offers a range of services to its customers. Wi-Fi
calling and texting is a feature only T-Mobile US offers to its
70 million plus customers for no extra charge. Customers can
turn any Wi-Fi connection to cellular tower. Spectrum-wave
penetration is not always reliable, especially when trying to
make calls inside buildings made of concrete. Houses or
building with metal roofs makes spectrum-wave penetration
very hard. T-Mobile US is the only wireless company that offers
such a service. Customers can also use Wi-Fi when traveling to
another country. This feature gives T-Mobile another tool to
stay above the competition. T-Mobile US offers its customers
international calling, texting and data when they travel to
Europe. Customers can connect to Deutsche Telekom network
when in Europe. T-Mobile US customers can also use their
phones when traveling to Canada and Mexico at no extra
charge. T-Mobile US is aggressive in its offers when it comes to
data use. T-Mobile US was the first company, amongst wireless
companies, to offer its customers unlimited data. According to
CNET below is a chart comparing unlimited plans:
Carrier

First line Cost
Second line cost
Third line cost
Fourth line cost
Total monthly cost for four lines
AT&T Plus
$90/month*
$55/month
$20/month
$20/month
$180/month*
Verizon
$80/month*
$60/month
$22/month
$18/month
$180/month*
T-Mobile One
$70/month*

$30/month
$41/month
$19/month
$160/month*
AT&T Choice
$60/month*
$55/month
$20/month
$20/month
$155/month*
Sprint pre-March 31, 2018
$50/month*

$40/month
$0/month
$0/month
$90/month*
Sprint post-March 31, 2018
$60/month*
$40/month
$30/month
$30/month
$160/month*
Source: CNET.COM
T-Mobile US is leading the industry in unlimited data plans.
Even though Sprint is cheaper than T-Mobile, it does not have
as a reliable of a service as T-Mobile US. Also, T-Mobile US
$G LTE network covers more Americans than sprint. T-Mobile
also leads all companies in uploads and downloads speed.

Download times comparison amongst major wireless companies
AT&T
Verizon
Sprint
T-Mobile
Temple Run 2 (48.61MB)
24 seconds
23 seconds
2 minutes, 38 seconds
21 seconds
Riptide GP 2 (49.65 MB)
45 seconds
43 seconds
39 seconds
"The Lego Movie" (1.4GB)
1 hour, 8 seconds

Source: CNET.com
The threats that T-Mobile faces apply to all wireless
communication companies. Threats, such as government
regulations and competition, do not put T-Mobile US in a
disadvantage. T-Mobile US is also going to spend 10 billion
dollars to purchase more spectrums at government auctions. No
data is available for spectrums purchase as the auction is still
going until April 15th, 2017.
Competitive Profile Matrix
T-Mobile is the third largest wireless carrier in the United
States of America. As of 2016, T-Mobile US was leading the
industry in growth. T-Mobile US added net-add of new
subscribers for eight quarters in a row. “ In 2015 we AGAIN
saw 8.3 million customers come to T-Mobile, and 2.1 million in
Q4 - marking 11 consecutive quarters of over 1 million net adds
and 3 quarters in a row with more than 2 million total nets for
the Un-carrier,” said John Legere, President and CEO of T-
Mobile. “That means we added 23,000 customers per day,
EVERY DAY for the last two years, so trust me when I say we
have NO plans to stop disrupting the status quo in wireless!” In
2016, T-Mobile added over 8 million customers. The other
companies cannot keep up with the growth T-Mobile is having.
The closest company, to add as many as T-Mobile, is AT&T.
However, AT&T is mostly adding tablets than regular phone
users. The company announced it is expecting to deliver strong
growth in adjusted EBITDA of between $9.1 and $9.7 billion.
Cash capital expenditures for 2016 are expected to come in at
around $4.8 billion, driven by the addition of another 2.4 to 3.4
million postpaid customers. T-Mobile is also becoming a more
recognizable company. According to Twitter, the company was
mentioned more than any other competitor. The incredible
addition of customers is helping T-Mobile US to increase its
market share. If T-Mobile continues to add customers at the rate
of eight million per year, it will have the biggest market share.
ARPU is low compared to other companies. However, T-Mobile

strategy is to make it wireless usage affordable for all. It is the
reason why T-Mobile US is adding more customers than any if
its competitors.
Source: Twitter
Comparison of Churn Rate for T-Mobile, Verizon, AT&T, and
Sprint
Source: Fiercewireless.com
T-Mobile US Churn Rate ranks third amongst major companies.
However, Branded postpaid phone churn was 1.46% in the
fourth quarter of 2015, down 27 basis points year-over-year,
marking the best churn improvement of the year. Sequentially,
churn was stable instead of the typical seasonal increase. Other
companies have seen their churn rate increase in the same
period. Coverage was an issue for T-Mobile US. However on
August 2016, T-Mobile US announced that it will match
Verizon’s leading industry 4G LTE coverage by the end of 2017
or sooner. As of 2016, T-Mobile covered 311 million
Americans. According to T-Mobile Chief Technology Officer
Neville Ray, T-Mobile is planning to materially close the gap
by the end of 2017.
Internal Factor Evaluation
Internal Factors/Strength
Weight
Rating
Weighted Score
4G LTE Network Capacity
15%
4
.72

Brand Recognition
9%
4
.44
Fastest Growing Telecom Company in the US
20%
4
.8
Large 4G LTE Coverage
12%
3
.48
Higher % postpaid vs. prepaid
7%
3
.33
Employee Satisfaction
13%
4
.56
Internal Factors/Weakness
Weight
Rating
Weighted Score
The ability to Repay Debt
6%
1
.06
Impact of Major Technology Equipment failures on network
9%
2
.18
Lack of Standard Process
9%
2

.18
Total
100%
3.75
T-Mobile US has revolutionized how wireless carriers do
business. As T-Mobile US put it “We are the Un-carrier, Un-
satisfied with the status quo and Un-afraid to innovate. The Un-
carrier strategy is an approach that seeks to listen to the
customer, address their pain points, bring innovation to the
industry and improve the wireless experience for all. According
to Forbes.com, In November, T-Mobile launched its highly
lauded “Binge On” feature, which enables users to stream video
onto their mobile devices without it counting against their data
plans. Netflix users of the world rejoiced, and the move
undeniably helped to drive T-Mobile’s massive additions last
quarter. Also according to Forbes.com, People are dropping
their old carriers and hopping on the bandwagon for a number
of reasons. T-Mobile has lured quite a few customers away from
Verizon by introducing a set of low-price leasing plans. Yet the
network’s real strength is its innovative data capabilities. T-
Mobile added more customers than any of its competitors for
the last two years. T-Mobile US added more than 8 million
customers in each of the last two quarters. These additions
represent far better growth than any other company operating in
the wireless sector. According to Nasdaq.com, the company
announced it is expecting to deliver strong growth in adjusted
EBITDA of between $9.1 and $9.7 billion. Cash capital
expenditures for 2016 are expected to come in at around $4.8
billion, driven by the addition of another 2.4 to 3.4 million
postpaid customers. T-Mobile US continue to expand its
capacity through the re-farming of existing spectrum and
implementation of new technologies including Voice over LTE
("VoLTE"), Carrier Aggregation, 4x4 MIMO, and 256
Quadrature Amplitude Modulation ("QAM"). As of February

2017, T-Mobile covers more than 98% of Americans matching
the leader in coverage, Verizon wireless. According to T-
Mobile US annual report, we generate the majority of our
service revenues by providing wireless communication services
to branded postpaid and branded prepaid customers. Our ability
to acquire and retain branded postpaid and prepaid customers is
important to our business in the generation of service revenues,
equipment revenues and other revenues. In 2016, our service
revenues generated by providing wireless communication
services by customer category were:
• 65% branded postpaid customers
• 31% branded prepaid customers
• 4% wholesale customers, roaming and other services
T-Mobile US was ranked the top wireless company to work for
by its employees according to Glassdoor.com.
Businessinsider.com ranked T-Mobile US as the number 17
company to work for in the U.S. T-Mobile US reviews its
employees’ salaries and hourly rates and match with market pay
of the best companies in the U.S.
T-Mobile US acquired MetroPCS through a reverse of
acquisition. It was a great business move. However, the lack of
standard procedures could become a problem in the future.
Being able to pay debt is a must for organizations to be
successful and profitable. However according to T-Mobile US
financial reporting, America’s third-largest wireless provider
reported a net income of $297 million in the final quarter of
2015, up from just $101 million a year earlier. Operating
activities brought in $2.2 billion across the quarter, service
revenues were up 11.7% year-over-year and adjusted EBITDA
shot up by 30.2% to $2.3 billion. Total revenue rose by over a
point to $8.25 billion, just beating past the average analyst
estimate of $8.2 billion.
Financial Ratio Analysis

2007-12
2008-12
2009-12
2010-12
2011-12
2012-12
2013-12
2014-12
2015-12
2016-12
Revenue USD Mil
2,236
2,752
3,481
4,069
20,618
19,719
24,420
29,564
32,053
37,242
Gross Margin %
44.3
43.2
42.4
43.0
58.3
58.9
49.8
47.9
53.5
55.6

Operating Income USD Mil
460
468
535
719
-4,279
-6,397
996
1,416
2,065
3,802
Operating Margin %
20.6
17.0
15.4
17.7
-20.8
-32.4
4.1
4.8
6.4
10.2
Net Income USD Mil
100
149
177
193
-4,718
-7,336
35

247
733
1,460
Earnings Per Share USD
0.56
0.84
0.98
1.08
-17.62
-27.40
0.05
0.30
0.82
1.69
Dividends USD
—
—
—
—
—
—
—
—
—
—
Payout Ratio % *
—
—
—
—

—
—
—
—
—
—
Shares Mil
148
178
178
178
268
268
677
816
823
833
Book Value Per Share * USD
10.62
11.61
12.97
14.32
15.59
18.43
15.48
17.99
19.86
21.60
Operating Cash Flow USD Mil
589

447
899
995
1,062
1,181
3,545
4,146
5,414
6,135
Cap Spending USD Mil
-788
-1,283
-884
-771
-956
-840
-4,406
-7,217
-6,659
-8,670
Free Cash Flow USD Mil
-198
-836
15
223
106
341
-861
-3,071
-1,245
-2,535

Free Cash Flow Per Share * USD
-1.33
-4.70
0.09
1.25
0.11
1.87
-2.85
-6.08
-3.05
-2.47
Working Capital USD Mil
1,152
302
694
791
1,927
2,340
6,420
5,208
5,362
5,195
Margins % of Sales
2007-12
2008-12
2009-12
2010-12
2011-12
2012-12
2013-12
2014-12
2015-12

2016-12
Revenue
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
COGS
55.67
56.77
57.59
56.96
41.70
41.07
50.18
52.12
46.48
44.44
Gross Margin
44.33
43.23
42.41
43.04
58.30
58.93

49.82
47.88
53.52
55.56
SG&A
15.75
16.27
16.31
15.28
32.63
34.46
30.23
29.98
31.79
30.55
R&D
—
—
—
—
—
—
—
—
—
—
Other
8.00
9.97
10.72

10.10
46.42
56.91
15.51
13.11
15.29
14.80
Operating Margin
20.58
17.00
15.38
17.67
-20.75
-32.44
4.08
4.79
6.44
10.21
Net Int Inc & Other
-10.58
-6.85
-7.80
-9.99
-3.18
-2.99
-3.87
-3.39
-3.39
-3.96
EBT Margin

10.00
10.16
7.58
7.67
-23.93
-35.43
0.21
1.40
3.05
6.25
Profitability
2007-12
2008-12
2009-12
2010-12
2011-12
2012-12
2013-12
2014-12
2015-12
2016-12
Tax Rate %
55.08
46.52
32.93
38.07
37.18
35.11
31.37
40.19
25.05
37.26

Net Margin %
4.15
5.43
5.08
4.75
6.22
7.73
0.14
0.84
2.12
3.77
Asset Turnover (Average)
0.45
0.45
0.50
0.53
0.56
0.52
0.81
0.55
0.54
0.58
Return on Assets %
1.86
2.44
2.56
2.53
3.46
4.01
0.12

0.46
1.14
2.19
Financial Leverage (Average)
3.14
3.16
3.23
3.12
3.24
3.03
3.51
3.61
3.77
3.61
Return on Equity %
8.20
7.70
8.18
8.01
11.02
12.54
0.40
1.65
4.21
8.08
Return on Invested Capital %
4.64
5.04
6.45
5.80

6.63
7.23
3.77
2.50
3.58
5.24
Interest Coverage
—
—
1.98
2.19
2.84
3.21
1.04
1.31
1.65
2.35
Liquidity/Financial Health
2007-12
2008-12
2009-12
2010-12
2011-12
2012-12
2013-12
2014-12
2015-12
2016-12
Latest Qtr
Current Ratio

2.99
1.41
1.87
1.99
3.36
3.76
2.11
1.59
1.56
1.58
1.58
Quick Ratio
2.59
0.99
1.51
1.53
2.84
3.20
1.64
1.18
1.24
1.04
1.04
Financial Leverage
3.14
3.16
3.23
3.12
3.24
3.03
3.51
3.61
3.77
3.61

3.61
Debt/Equity
1.62
1.50
1.58
1.48
1.61
1.41
1.18
1.56
1.58
1.50
1.50
Efficiency
2007-12
2008-12
2009-12
2010-12
2011-12
2012-12
2013-12
2014-12
2015-12
2016-12
TTM
Days Sales Outstanding
4.89
4.41
4.52
4.91
5.12
6.32
27.78

33.85
20.80
18.05
18.05
Days Inventory
29.62
30.97
27.62
24.29
25.10
31.07
12.59
19.79
29.15
26.53
26.53
Payables Period
77.64
68.67
40.45
49.84
41.18
39.76
49.80
98.87
140.37
124.61
124.61
Cash Conversion Cycle
-43.12
-33.29
-8.30
-20.64

-10.96
-2.37
-9.43
-45.23
-90.42
-80.02
-80.02
Receivables Turnover
74.59
82.78
80.75
74.26
71.24
57.75
13.14
10.78
17.55
20.22
20.22
Inventory Turnover
12.32
11.78
13.21
15.03
14.54
11.75
29.00
18.44
12.52
13.76
13.76
Fixed Assets Turnover
1.42

1.16
1.14
1.18
1.26
1.23
2.49
1.87
1.77
1.82
1.82
Asset Turnover
0.45
0.45
0.50
0.53
0.56
0.52
0.81
0.55
0.54
0.58
0.58
Source: Nasdaq.com
Receivables Turnover
T-Mobile US receivables turnover has been increasing from
year over year. In 2014, the receivables turnover was 10.78. It
increased the next two years 17.55(2015) and 20.22 in 2016. An
increased high turnover means that cash is collected more
quickly for use in the company.
Asset Turnover
T-Mobile US asset turnover has also increased year over year.
In 2014, the company generated $0.54 for of revenue for every

$1 of assets that the company owns. In 2015 and 2016, the
company increased its asset turnover to $0.58.
Quick Ratio
T-Mobile US quick ratio was almost steady, 1.59 in 2014 and
1.58 in 2015 and 2016. This indicates that the company can only
cover more than its current liabilities by using all cash-on-hand,
liquidating short-term marketable securities and monetizing
accounts receivable.
Gross Profit
T-Mobile US has been aggressive going after its competitors
and so far it is winning. The gross profit margin increased in
the last three years. In 2014, the gross profit margin was 47.88
and in 2015 it increased to 53.32. The same trend continued in
2016 as it increased to 55.56. The 55.56% gross margin for the
company shows that 55.56% of revenues generated by the firm
are used to pay for the cost of goods sold. The gross margin
profit increase is an indication of increased competition. It
explains the company’s strategy to become the number one
wireless company in the country.
Operating profit margin
The operating profit margin for T-Mobile US has also increased
in the last three years. In 2014, the operating margin was 4.79%
and in 2015 it was 6.44%. The profit margin increased in 2016
to 10.21%. For every dollar of revenues generated, $.10 is left
after deducting cost of goods sold and operational expenses.
Increasing operating margin is a good sign. T-Mobile US
strategy to be more competitive and offer the best handsets and
products is working.
Net profit margin
The profit margin for T-Mobile has increased year over year
since 2014. In 2016, the profit margin was at 3.77%. This
suggests that for every dollar of revenue generated by T-Mobile
US, $.0377is created for shareholders. Increasing the net profit
margin means more pay out for shareholders.

Return on Assets and Return on Equity
The company’s return on assets has also been increasing year
over year. In 2015, it was 1.14% and in 2016 it increased to
2.19%. So in 2016, for every dollar of company assets the
company is generating $0.0219 in net income. This is a good
sign for T-Mobile US. The same trend continues for ROE. ROE
has increased from 4.21%, in 2015, to 8.08% in 2016. So for
every dollar in equity, the company is generating $0.08 in net
income.
References
"ATHYPERLINK
"http://www.webcitation.org/5yH71PHgE"&HYPERLINK
"http://www.webcitation.org/5yH71PHgE"T To Acquire T-
Mobile USA from Deutsche Telekom". Att.com. AT&T
Intellectual Property. 2011-03-20. Archived from the original
on 2011-04-28.
"ATHYPERLINK

"http://www.webcitation.org/5yH71PHgE"&HYPERLINK
"http://www.webcitation.org/5yH71PHgE"T HYPERLINK
"http://www.webcitation.org/5yH71PHgE"ToHYPERLINK
"http://www.webcitation.org/5yH71PHgE" Acquire T-Mobile
USA from Deutsche Telekom". Att.com. AT&T Intellectual
Property. 2011-03-20. Archived from the original on 2011-04-
28.
https://www.cnet.com/news/how-does-verizon-unlimited-plan-
stack-up-against-the-others/
https://www.cnet.com/news/t-mobile-vows-to-match-verizons-
coverage-in-next-12-months/
https://www.forbes.com/sites/gurufocus/2016/02/18/t-mobile-
running-laps-around-its-competition/#570cc30a577d
http://library.sdsu.edu/research-services/research-help/peer-
reviewed-articles
http://www.nasdaq.com/symbol/tmus/competitors
https://newsroom.t-mobile.com/news-and-blogs/t-mobile-adds-
over-8-million-customers-for-second-consecutive-year.htm
http://www.pcc.edu/library/research/find/peer-reviewed-
articles/wireless-competition
https://www.statista.com/statistics/283513/arpu-top-wireless-
carriers-us/
https://www.statista.com/statistics/283511/average-monthly-
churn-rate-top-wireless-carriers-us/
http://www.vault.com/company-profiles/telecommunications/t-
mobile-usa,-inc/company-overview.aspx
SOC 1010, Introduction to Sociology 1
Course Learning Outcomes for Unit VI

Upon completion of this unit, students should be able to:
1. Analyze the ideas of sociological theorists in terms of their
historical, economic, and social contexts.
1.1 Use the major perspectives in sociology to better understand
current events.
4. Evaluate patterns of behavior through sociological skills and
theory.
6. Explain how social structure shapes an individual’s life
chances.
6.1 Determine when decisions are made from free will and when
they are made within the
confines of social status and role.
Reading Assignment
Chapter 10:
Social Class
Chapter 11:
Global Inequality
Unit Lesson
Stratification
When discussing stratification, it is useful to think of the image

of geographical strata or a layer cake with
multiple layers. Each layer of stratification contains similar
properties within, but differing properties from the
other layers.
Society is also comprised of layers, which we call groups or
classes. Each class has similar properties within
the class, but differs considerably from other classes. Within
each class, people have certain life chances and
everyday practical consequences, including housing size,
alcohol consumption, and mate selection. These
are all different from one class to another.
On one level, this seems obvious. However, Durkheim
admonishes never to assume a practice without first
studying it. We turn to theory to help understand how
stratification works.
Functionalists, a la Parsons, study what makes social order
possible. According to functionalism, there are
two major ways for solidarity: common beliefs/values (which
fuse members together) and the integrative role
of the major social institutions. Kingsley Davis and Wilbert
Moore tried to discover the function of stratification.
They were functionalists, and as such, believed that
stratification maintained social equilibrium. In their essay
“Some Principles of Stratification,” Davis and Moore answered
their question concerning the function of
stratification thusly: “(Its function is) to ensure that the most
important positions are conscientiously filled by
the most qualified persons.” (1945:244).
To Davis and Moore, the division of labor included four
categories: economic, political, technological, and
religious. They saw these categories as necessary for the
survival of society.

In each area, there are certain jobs that are more important and
thus more highly regarded. However, these
positions are also the ones that require the most training and
talent. Doctors would not go through the
rigorous training they are required to complete were it not for
the outcome, said Davis and Moore (1945).
UNIT VI STUDY GUIDE
Social Class and
Global Inequality
UNIT x STUDY GUIDE
Title
They further argue that societies motivate people to fill these
important but difficult roles and positions by the
use of unequal rewards.
Most sociologists are very skeptical of the functionalist
approach to stratification. For one reason, we need
only look to the patterning of who becomes a doctor in our
society to see that it is more than simply the best
suited for the job. After all, medical school is very expensive,
even with scholarships. However, functionalists
are good at pointing out areas that sociologists should study and
for describing conditions of stratification.
Conflict theory offers better explanations for stratification.

Karl Marx believed that in all societies, people produce goods
to satisfy their needs. In doing so, societies will
differ. For example, things such as families, governments,
education, religion, law, and cultural values will all
be different for a society based on hunting and gathering than
they will for a postindustrial society.
Social structure refers to stable networks that connect people to
each other and to society. This social
structure shapes the options available to people. What shapes
the social structure? According to conflict
theory, the mode of production shapes the structure.
Along this line, Marx predicted that there would eventually be
two classes: those who own the means of
production (the bourgeoisie) and those who own the labor (the
proletariat). Accordingly, those with the means
and power will control those without the means and power.
Marx also predicted that one day, the proletariat
would recognize this control and rise up to overcome the
bourgeoisie. The options available to people are
shaped by the social structure, which is shaped by the means of
production. This is the foundation for
understanding stratification from a Marxist sociological
perspective.
Think about it this way. Say you work for a huge conglomerate
called ABC Company, and you wish to take a
vacation. Are you the one who decides when you take your
vacation, or do you need your boss’ input on how
many days you can take off, and when it is convenient to take
those days off? Most workers must make their
choices within the structure of their job. If you own ABC
Company, you do not need anyone’s permission to
take a vacation.

Although Marx’s views have not fully been realized with
respect to revolt, we do see a clear distinction
between the haves and have-nots within our society.
Sociologists study these distinctions. Additionally,
sociologists study how networks of social relationships, such as
family, law, and economy, are connected.
When we look at patterns of behavior, we ask who benefits.
During the time Marx was writing, he noted that the capitalists
of his day wanted to lengthen the workday and
to increase the production of the workforce. Who would
benefit? The owners would! In our own time, we might
ask ourselves, who benefits when businesses take their
production to foreign lands? The owners do, of
course. Who benefits from privatized schools? The owners do.
Another key element in Marxist theory is the fact that those of
means have power and therefore have a vested
interest in keeping things the way they are (maintaining the
status quo). Both the bourgeoisie and the
proletariat have an economic position defined by their structural
position. Only the bourgeoisie recognizes
class-consciousness and works together with the other people in
the group. There is a sense of solidarity
based on shared interests of the position.
However, among the proletariat, interests are fragmented by
differing religious beliefs, ethnic loyalties,
prestige distinctions, and the rhetoric of separation. Can you
think of ways that we, the proletariat, are
fragmented from each other? (And yes, you do belong to the
proletariat, even if you only own a small
business.)
Max Weber also wrote prolifically about stratification in

society. According to Weber, it was determined not
simply by who owns the means, but also by the values of the
group. We act on both our economic interests
and on our values. For Weber, there are three types of
inequalities: market, status, and power.
Weber believed there are three market situations that result in
economic inequality. The labor market, which
divides people into employers and employees, creates an
economic inequality. The money market, which
separates creditors and debtors, also creates an economic
inequality. Finally, the commodity market, which
differentiates sellers and buyers, property owners and tenants,
and so on, also creates economic inequality.
UNIT x STUDY GUIDE
Title
Another area for inequality is a status group. Weber noted that
status inequality (or prestige) bases itself on
the prevailing values and ideals of society. For example, actors
have more prestige than police officers have,
and singers have more prestige than office clerks have. Being
part of a status group means having some
sense of shared identity with one another. This identity comes
with a desire to maintain and protect one’s
position. How? Each status group selectively interacts within

the group by socializing with their own group,
inviting group members to their homes, sending their children
to the same schools, and joining the same
organizations.
A final type of inequality is one of power. Weber argued that
parties organize for the pursuit of power. These
groups are action-oriented, can be political or not, and can be
based on economics (class) or on the ways
people live (status).
In the following units, we will discover stratification based on
gender, sexuality, race, and ethnicity.
Reference
Davis, K., & Moore, W. (1944). Some principles of
stratification. American Sociological Review, 10(2),
242-249.
Suggested Reading
Learn more about this week’s topics by researching in the
databases of the CSU Online Library. The following
sources can be found in the General OneFile database:
Bickford, D. (2012). “We all like to think we’ve saved
somebody:” Sex trafficking in literature. Journal of
International Women’s Studies, 13(3), 127-137.
Bierman, A., & Schieman, S. (2007). Religious activities and

changes in the sense of divine control:
Dimensions of social stratification as contingencies. Sociology
of Religion, 68(4), 361-372.
Chuang, J. (2006). Beyond a snapshot: Preventing human
trafficking in the global economy. Indiana Journal
of Global Legal Studies, 13(1), 137-164.
Millican, M., & Tiapula, S. (2008). Identifying the victims of
human trafficking. Prosecutor, Journal of the
National District Attorneys Association, 42(1), 34-41.
Potocky, M. (2010). The travesty of human trafficking: A
decade of failed U.S. policy. Social Work, 55(4),
373-376.
Rotolo, T., & Tittle, C. (2000). IQ and stratification: An
empirical evaluation of Herrnstein and Murray’s social
change argument. Social Forces, 79(1), 1-29.
UNIT x STUDY GUIDE
Title

Learning Activities (Non-Graded)
SocThink
Your textbook provides several opportunities for you to explore
relevant topics, from personal self-exploration
to challenging questions concerning topics being studied in this
unit. Taking the time to read and respond to
these opportunities will help you learn and apply the
information being studied. These opportunities can be
found on the following pages:
o Pg. 241
o Pg. 242
o Pg. 245
o Pg. 247
o Pg. 251
o Pg.256
o Pg. 257
o Pg. 260
o Pg. 268
o Pg. 271
o Pg. 272
o Pg. 277
o Pg. 280
o Pg. 282
o Pg. 285
o Pg. 286

Check Your Learning
Quizzes are a way to self-test to see if you understand what you
are studying. The textbook provides a brief
“Pop Quiz” for each chapter. Take advantage of this learning
tool to enrich your learning experience! The
answers are provided, so you can check and see how well you
did. For this unit, the quizzes are available on
the following pages:
Caste System
Use the textbook and the Internet to learn about the caste
system in India. Although now illegal, the caste
system is still a lived reality today. List and explain the five
job-based castes. Find examples of each. Discuss
mobility in a caste system.
When you write your paper, be sure to include in-text citations
and a reference page.
These are non-graded activities, so you do not have to submit
them. However, if you have difficulty with any
concepts, contact your instructor for additional discussion
and/or explanation.

Strategic Management Case
T-Mobile US
Phase 2
04/18/17
MBA-599
T-Mobile US Current Strategy
T-Mobile US current strategy is veered toward easing customers
pain points and making handsets and wireless services
affordable to all. T-Mobile US main strategy is the UN-Carrier
strategy. The UN-Carrier strategy is meant to make cellular
services affordable for customers, especially families, by
eliminating contracts, fees, and allowing customers to upgrade
their handsets whenever they choose to. Since 2013, T-Mobile
US has adopted several strategies. It was the first major
wireless company to introduce “no contracts” services to its
current customers and to those who would like to join T-Mobile
US innovative approach to the wireless industry. The company
even offered to pay off contracts for those who wanted to switch
from Verizon, AT&T, and Sprint. Next, T-Mobile US
introduced BINGE ON as part of its UN-CARRIER strategy.
BINGE ON allowed customers to stream videos and music apps

without using their data allowance. It gave a way, for
customers, to stream unlimited data without extra charges. T-
Mobile US, then, introduced unlimited data plans as part of its
UN-Carrier strategy. On January 2017, T-Mobile US announced
that it will eliminate taxes and fees to its T-Mobile One
unlimited data plans. The UN-Carrier strategy is a pricing
strategy. T-Mobile US wants to be the cheapest and most
affordable organization in the wireless industry. T-Mobile US is
eliminating fees and taxes which in turn will help the
organization reduce its customer service cost. By simplifying
customer's’ monthly billing statements, T-Mobile is hoping to
reduce calls to its call centers. According to T-Mobile US, one
third of customers’ calls are related to billing. The move will
also improve customer service quality and decrease the churn
rate. At the end, the UN-Carrier strategy is going to help the
organization cut operational costs and the saving can be used to
keep improving its products and services. The price reduction
strategy for subscriptions has helped T-Mobile US add over
thirty million customers since 2013. T-Mobile US has been
offering its customers an option to make calls over WIFI
networks. If a customer is in an area where the network signal is
weak or not effectively penetrating buildings, T-Mobile US
customers can connect to any WIFI network and use their
handsets as if they were using any wireless tower. Buildings
constructed with concrete or have heavy metal roofs are making
spectrum penetration ineffective. T-Mobile US is using VoLTE
technology. VoLTE stands for voice over LTE which allows T-
Mobile US to repurpose spectrum from slower 2G and 3G
speeds to LTE. According to Neville Ray, the company’s chief
technology officer, T-Mobile is the first U.S. carrier to deploy
cell service relying on LTE-U — technology that uses broadcast
frequencies typically meant for Wi-Fi signals. Another of T-
Mobile’s recent lab inventions is the Digits feature, which
allows a single phone number to ring across many devices. It
also lets one phone hold multiple phone numbers. The latest
technology T-Mobile is using is call Enhanced Voice Services

(EVS). EVS is next generation voice technology. EVS
technology works better than Volte technology. It is more
reliable and covers more distance. EVS uses broader audio
frequency range which translates to a more realistic sounding
voice audio. The latest technology T-Mobile US laboratories are
working on is the 5th generation technology which will improve
the range of services, quality of calls and data speed. On
January 5, 2017, T-Mobile announced that it would go "All In"
on Unlimited by making T-Mobile ONE the only postpaid
consumer plan available at the Un-carrier. T-Mobile One
eliminated taxes and fees.
SO Strategies
T-Mobile US is the third largest wireless provider in the United
states of America. As of the Q4 of 2016, T-Mobile has over
seventy million customers. Since 2012, T-Mobile US has seen
record customer growth. According to 451 Research, T-Mobile
has added an average of eight million customers since 2014.
Since 2012, T-Mobile has doubled the number of its customers
growing it from over 33 million to over 70 million. This
increase is by far the best in the industry, outpacing competitors
like Verizon and AT&T. Since the end of 2012 to the 2016, T-
Mobile increased its market share from 10% to over 17%.
Verizon’s market share was -1% and AT&T was 1%. The Un-
carrier strategy was unleashed in waves. The strategy, has
helped T-Mobile, increase its customer base and be a major
player in the wireless industry. It has disrupted the wireless
industry and redefined the way operators do business. The many
of promotions, stemming from the Un-Carrier strategy, has
helped T-Mobile increase its market share. Since the launch of
the Un-Carrier Strategy, T-Mobile has been increasing its
market share. Customers are switching from companies like
Verizon, AT&T, and Sprint to T-Mobile. According to
Consumer Intelligence Research Partner(CIRP), “The third-
largest mobile carrier posted by far the highest growth rate for
new phone activations among customers transferring from a
competitor, at 42% of its base that was at risk of leaving in the

quarter”. According to Shimp, “sales promotion is any incentive
used by organizations to induce consumers to buy a brand and
to encourage the sales force to aggressively sell it” Shimp
believes that when such incentives are given, promotion has the
power to influence the behavior of the buyers and to encourage
brand switching. The Un-Carrier Strategy has helped, T-Mobile
US, to propel its market share to new heights and to retain
already existing customers. Expanding coverage and acquiring
high quality spectrum are two opportunities available, to T-
Mobile US, to keep increasing its customer growth. According
to the 2016 T-Mobile Investor Factbook, “T-Mobile continues
to expand its coverage breadth and currently provides 4G LTE
coverage to 314 million people, up from zero 4G LTE coverage
four years ago. The Company is targeting to provide 320 million
people with 4G LTE coverage by year-end 2017”. At the end of
2016, T-Mobile US used 70% of its spectrum for 4G LTE
coverage compared to 52% in 2015. The organization is also
aggressively re-farming its spectrum committed to 2G and 3G.
Expanding 4G LTE coverage is crucial to its growth. Closing
the gap between its top two competitors, Verizon and AT&T,
will benefit growth and quality of services. 4G LTE enables
customers to download and upload at high speeds and great
quality. In 2015 alone T-Mobile doubled its LTE geographic
coverage and now covers 97% of Verizon customers. In Q4
2016, T-Mobile’s average 4G LTE download speed was 24.4
Mbps compared to Verizon at 24.3 Mbps and AT&T at 23.9
Mbps. In Q4 2016, T-Mobile's average 4G LTE upload speed
was 12.1 Mbps compared to Verizon at 8.5 Mbps and AT&T at
7.6 Mbps. T-Mobile US expanded its coverage using high
quality spectrum. Coverage expansion did not affect its service
quality either. Sometimes quantity means less quality. However,
the great news for T-Mobile is that the quality did not take a
back seat to quantity but rather the opposite.
WO Strategies
Historically T-Mobile’s Average Revenue Per User (ARPU) has
been low compared to the competition. According to Statista, T-

Mobile’s ARPU at the end of Q4 2016 was at $43.14, Verizon
was at $45.54, and AT&T was at $51.12. One might conclude
that because of the low ARPU, T-Mobile’s revenue is would
also be the lowest compared to the competition. The low ARPU
is a result of all the Un-carrier strategy moves made by T-
Mobile. According to T-Mobile’s Investor Fact Book, the low
ARPU is due to one of the Un-Carrier Strategies “Data Stash”
which allowed customers to carry over their unused data to the
next billing cycle. In addition, dilution from promotional
activities had an impact on ARPU. T-Mobile’s low ARPU does
not reflect how well the organization’s is doing in service
revenue year-over-year. T-Mobile’s revenue was up year-over-
year to 12.2% between 2015 and 2016. This increase lead the
wireless industry year-over-year. According to T-Mobile, the
increase of service revenue was due to increased customer base
growth and expansion markets. Customer growth and expansion
is due to the aggressive moves T-Mobile has been making to
purchase more spectrum. The expansion and positive customer
growth has offset the low ARPU. Bandyopadhyay (2016) said,”
With greater maturity in the marketplace, operators attract more
marginal customers leading to inevitable squeezing of ARPU
and margins”. Competition is fierce in the wireless industry,
and organizations are desperate to attract new customers or steal
customers from each other. Something must give and one of the
best ways to do that is by offering low prices. T-Mobile’s
ARPU is low due to competition and to the aggressive moves
that the organization has been making through its strategies. T-
Mobile wants to make its services affordable to all and mostly
families. Competition is affect prices. T-Mobile had to make its
prices more attractive if it wanted to beat competition.
Customers were willing to give up better coverage to save on
their wireless monthly charges. The strategy worked for T-
Mobile and made the fastest growing wireless company in the
country. Economic theory would predict that a monopoly area
would have higher prices, and thus higher ARPU and lower take
rate, than an area with competition.

ST Strategies
T-Mobile’s leadership is the main reason the organization has
been successful. Since taking over as T-Mobile’s CEO, John
Legere has transformed the wireless industry in the U.S. John
Legere became the organization’s CEO in 2012. Since then, T-
Mobile has more than doubled its customer base from about to
33 million customers to over 70 million customers. His
aggressive strategies have so far paid off and made T-Mobile
US a major player in the wireless industry. Under his watch, T-
Mobile overtake Sprint as the third largest carrier in the U.S. In
March 2013, The Un-Carrier marketing campaign begun. The
campaign is John Legere’s signature initiative to reinvent T-
Mobile and make a force to be reckoned with. T-Mobile
Introduced twelve elements every few months. T-Mobile is
lacking diversification compared to its top two competitors,
Verizon and AT&T. Verizon and AT&T both offer home
internet. AT&T merged with Direct TV. The point of the
diversification strategy is to set a brand apart. Verizon and
AT&T are aggressively diversifying their organizations. T-
Mobile was in talks with Sprint to merge but the merger did not
go through. In addition, T-Mobile and Sprint merging cannot be
called diversification. T-Mobile has many options to diversify
its operations. There are four potential players in the merger
discussions. Charter, Comcast, Dish, and Sprint. Most likely, T-
Mobile, will merge with one of this companies. The best
merger, in my opinion, would be a merger with a cable
company. Technologies are changing every week. Customers are
streaming more and more. A merger with a cable company such
as Comcast would make T-Mobile an even more competitive
organization. The merger would give T-Mobile access to new
customers and to combine its already successful Un-carrier
strategies with offers that include home internet and TV
bundles. Under, John Legere, T-Mobile has more than doubled
its customer base. Effective leadership is essential to a
successful organization. According to Matassa 2006,
Successful implementation of management programs requires

explicit buy-in by senior management, as they determine
strategy and must provide insights into the objectives of the
organization.
WT Strategies
T-Mobile US Operating Expense for Q4 2016 was $942 Mil. T-
Mobile US Interest Expense forQ4 2016 was $-399 Mil. The
higher the ratio the stronger the company’s financial strength is.
So as of December 2016, T-Mobile interest coverage was 2.36.
According to Nasdaq.com, Verizon’s interest coverage was 7.06
at the end of Q4 2016 and AT&T’s interest coverage was 3.48 at
the end of Q4 2016. Compared to the top two wireless operators
in the U.S, T-Mobile’s interest coverage is low. T-Mobile is
generating enough net income due tower payments and the
acquisition of spectrum. The organization need to acquire low
band spectrum that would give it more coverage and bring in
even more customers. The good news is that T-Mobile is
growing at a record pace. The organization more than doubled
its customer base in the last four years from 33 million to over
72 million. Low and spectrum, which helps with signal
penetration into buildings, has been the pain point for T-
Mobile’s coverage. T-Mobile took part in the government
auction and won big. In this year’s auction, T-Mobile has more
than quadrupled its low-band spectrum holdings. T-Mobile won
45% of all spectrum sold in the auction. T-Mobile picked up
spectrum with licenses covering 100% of the country and Puerto
Rico. The successful purchase of low band spectrum is going to
make T-Mobile US one of the top wireless provider in the
country. AT&T and Verizon has a used spectrum holdings and it
is already congested and crowded. Customers are going to enjoy
better quality service on an already fast network. The purchase
will help T-Mobile increase its net income and in turn increase
its interest coverage ratio. Being able to bring in even more
customers and not have to invest as much on spectrum for the
next few years will increase T-Mobile net income.
BCG Analysis for T-Mobile US
Stars

T-Mobile more than doubled its customer base in the last four
years. T-Mobile went from 33 million customers to over 70
million customers. Customer growth has been the main reason.
Consumer Intelligence Research Partners reported That “in
2016, T-Mobile easily posted the highest growth rate for new
phone activations among customers transferring from a
competitor, at 42% of its base that was at risk of leaving in the
quarter.” Verizon was at 14%, AT&T was at 10%. Combining
both customers who transferred other carriers and new first time
mobile phone users, T-Mobile had a net 31% of activations.
Verizon was at 1% and AT&T was at 3%. T-Mobile outstanding
industry-leading customer growth was due to its Un-carrier
strategy. T-Mobile made it its priority to become customer
friendly. T-Mobile launched 13 Un-carrier strategies in four
years. The organization eliminated contracts, offered free
international data roaming, introduced unlimited music and
video streaming, upgrading phones anytime, and latest move
eliminated all taxes and fees with all unlimited plans. T-Mobile
went from the fourth largest wireless operator in the US to
third. T-Mobile strategies for growth have been paying and it
should continue the same trend as it is also expanding its
coverage with the latest spectrum purchase from the government
auction.
Cash Cows
T-Mobile has always had issues with network coverage
especially in the rural areas. Compared to other organizations
such as Verizon and AT&T, T-Mobile was lagging in coverage.
T-Mobile’s network is the fast 4G LTE network (Figure 3). T-
Mobile has an opportunity to make its network a cash cow. T-
Mobile’s network evolution has been significant to its success.
In 2013, T-Mobile had zero LTE point of presence. Next, T-
Mobile covered 305 million customers with its LTE coverage.
In another word, T-Mobile is, now, covering 97% of Verizon’s
customers. Today, T-Mobile covers 314 million people and in
pace to cover 320 people by the end of 2017. T-Mobile is the
only organization that offers WIFI calling, a service that allow

customers to connect to any WIFI hotspot and use their devices
as if they are connected to regular towers. Low-band spectrum
has been a pain point for T-Mobile’s network coverage. The
low-band spectrum allows signals to penetrate homes and
buildings. The organization made spectrum deals to cover more
point of presence (POP). Today, T-Mobile covers 258 million
with its low-band spectrum. The need to cover more POPs is
dire for its continuous success. We started to analysis as the
government auction to bid on spectrum was taking place. T-
Mobile purchased 45% of available low-band spectrum and
spent eight billion dollars. After the purchase of low-band
spectrum T-Mobile is going to cover almost every inch of the
US and Puerto Rico.
Question Marks
Voice stream PCS, Suncom Wireless, Eliska Wireless, Aerial
Operating, and Metro PCS Company are all subsidiaries of T-
Mobile USA. Out of all its subsidiaries, Metro PCS is the only
wireless provider that have been posting strong customer growth
and bring more revenue than all the other subsidiaries together.
The other subsidiaries are either losing customers or breaking
even. In 2016, prepaid net additions were 2.5 million which lead
the prepaid industry. It would have been more if the other
subsidiaries did not lose customers. Wholesale net additions
also added customers, however wholesale ARPU is very low
compared to the industry average. Both the subsidiaries and
wholesale units have high prospects have high growth
prospects. Since subsidiaries operate as separate entities, the
effect of the slow growth is not negatively affecting T-Mobile
US operation or growth. Some subsidiaries are fast growing
and can turn into Stars with time.
Space Matrix Analysis
The Space analysis recommends aggressive growth strategies.
T-Mobile is in a strong position and should act to maximize its
strategies. T-Mobile US need to continue its wireless revolution
to build on its already existing competitive advantage. The
organization should also match any moves by its top

competitors, especially the ones that could made by Verizon and
AT&T and stay ahead of the curve. T-Mobile needs to keep
innovating its Un-carrier strategy by keeping prices lower than
competitors and by keeping the pressure. The organization need
to keep its network expansion which will allow it cover new
markets. T-Mobile US needs to keep the pressure on
competition and attack their strengths. The aggressive
marketing campaigns, that T-Mobile US has been waging,
should continue to avoid complacency. T-Mobile should also
use its strong financial position and keep attacking its
competitors with weak financial positions such as Sprint. The
organization should also keep attacking its competitors’
weaknesses. T-Mobile should also keep offering customers
different service from competition such as WIFI calling, data
international roaming, free calls to Mexico and Canada and
Volte technology to increase its competitive advantage. T-
Mobile needs to keep growing by either merging with a wireless
company or even better a cable company. This move would
allow T-Mobile to become me diversified and offer alternative
services to customers. T-Mobile US needs to develop new
technologies such as 5th generation wireless systems.
Developing a 5th generation technology is needed to align its
aggressive strategies. T-Mobile US would support increasing its
competitive advantage by staying aggressive with developing
new technologies.
IE Matrix Analysis
T-Mobile’s EFE total weighted average is 3.64 and IFE total
weighted average is 3.75. The IE matrix results suggest that T-
Mobile should follow intensive and aggressive strategies. One
strategy is market penetration. Market penetration would help
T-Mobile US to increase its market share. The organization
should introduce new products and services to stay aggressive.
A merger with a cable organization would make T-Mobile to
introduce new products and services. T-Mobile is already
offering low prices and it is also pursuing a very aggressive
marketing campaign. The organization has been advertising its

brand, products and service in every way possible. In the last
four years, T-Mobile US has more than doubled its customer
base. T-Mobile should continue its intensive and aggressive
moves to gain more market share. Market Development is
another strategy T-Mobile US can pursue. T-Mobile US should
keep expanding its network by purchasing more spectrum and
especially low-band spectrum. Network expansion would help
T-Mobile US address one of its main pain points. The lack of
network coverage in rural areas and in certain states like
Montana has been T-Mobile’s weaknesses. This move would
align with T-Mobile’s already aggressive strategies like the Un-
carrier strategies. T-Mobile US should look to increase its
ARPU by pushing already existing products such as mobile
hotspot and ask its sales force to match its aggressive strategies
by offering customers add-ons such Name ID which allow
customer to filter incoming also and avoid scam calls among
other features. T-Mobile should also focus on increasing its
business accounts. The organization is already offering low
prices for business accounts where each line cost only 16
dollars. T-Mobile CEO John Legere said that 40 percent of
carriers' wireless revenue comes from business users. T-Mobile
US market share of business accounts is low compared to
competition. Product development is another strategy T-Mobile
should use for its aggressive campaign. Product development
can be achieved through addressing customer needs or
extending the brand. Operationally, T-Mobile should consider
backward integration, forward integration and horizontal
integration.
Strategic Alternatives
T-Mobile introduced an aggressive strategy to businesses
through its 9.0 Un-carrier business. Business accounts make up
about 14% of T-Mobile’s wireless sales. Business accounts
remain low compared to other wireless organization. Business
accounts are different from regular accounts (individuals or
families). Businesses value network quality and reliability over
low cost. For example, a truck delivery business would not be

able to use T-Mobile’s network due to its lack of coverage in
rural areas. Business accounts are still a challenge for T-Mobile
US. According to T-Mobile’s CEO, 99.7% of business employee
over 500 employees and 90% of businesses employee less than
20 employees. T-Mobile Us has a lot of catching up to do when
it comes to business accounts. T-Mobile should focus on an
aggressive Un-carrier strategy for businesses. It should follow
the same strategy for the business segment as it did with the
consumer segment especially with the new spectrum the
organization just purchased from the government auction. The
simplicity and transparency of the 9.0 Un-carrier business
strategy should be a strength for T-Mobile as the other wireless
operators keep offering more complicated and more expensive
business plans.
Evaluation of Organizational Structure
T-Mobile Us is include T-Mobile and Metro PCS. T-Mobile US
president and CEO is John Legere. He has served as the
company’s leader since 2013. He has over 34 years of
experience in the wireless communication and technology
industries. His Vice president is David Carey and has been with
the company since 2013. He also has 34 years of experience in
in the telecom and energy industries. T-Mobile US subsidiary,
Metro PCS, is run by Tom Keys. Tom Keys is also the president
of T-Mobile Indirect channels. T-Mobile’s organizational
structure type is hierarchical. This type of structure has clear
lines of communication, unifies department, managers are the
clear leaders, and subordinates know to whom address any
questions or concerns. The hierarchical structure promotes
efficient operations and cost savings through economies of
scale. This type of structures usually present some challenges
when it comes to communication between departments. We can
say from experience working for T-Mobile US, that some of the
disadvantages which come with the hierarchical structure such
as lack of communication, lack of innovation, and lack of
collaboration does not apply to T-Mobile US. Upper
management has an Open-door policy and innovative ideas are

welcomed. Room for growth within the organization is high and
the organization prefers to promote from within. The culture of
the organization is veered toward employee satisfaction. Pay is
very competitive and the organization either matches or beat the
competition. T-Mobile was recognized as the “Best Place to
Work” and “Top Employer” by industry experts, the media, and
human rights organizations year after year. As an employee of
this organization, it is very hard to find any recommendations to
change the way the company is doing business. However, the
company is relentless in its pursuit to be the best organization
to work for. Continuous improvements are very important to the
leadership of the organization. T-Mobile US is always searching
to better itself through surveys and leadership involvement with
all employees.
References:
ARPU for wireless carriers in the United States from 1st quarter
2013 to 4th quarter 2016 Retrieved 4/11/17 from
https:// www.statista.com/statistics/283513/arpu-top-
wireless-carriers-us/
Why T-Mobile Would Rather Merge with Big Cable and Not
Sprint. Retrieved on 04/10/17 from
http://fortune.com/2017/03/08/tmobile-sprint-merger-cable/
Aaron Pressman
T-Mobile US, Inc. Investor Factbook. Retrieved on 04/14/17

from
T-Mobile US Reports Fourth Quarter and Full-Year 2016
Results retrieved from
file:///C:/Users/Oaks/Downloads/Q42016InvestorFactbook.pdf
Phil Goldstein | Mar 19, 2015 12:36pm. T-Mobile's business
plans could appeal to small businesses but not big enterprises.
Retrieved From on 04/18/17 from
http://www.fiercewireless.com/wireless/analysts-t-mobile-s-
business-plans-could-appeal-to-
small-businesses-but-not-big
Bandyopadhyay, P. (2016) Best Practices of Campaign
Management for a Telcom Operator. J
Telecommun Syst Manage 5: 135. doi:10.4172/2167-
0919.1000135
Nicholas C. Yannelis. Economic Theory. ISSN: 1432-0479
(electronic version). Journal no. 199
Appendix
SWOT Matrix
Strengths (S)
1- High Customer Growth
2- Quality Service
3- Un-Carrier Strategy
4- Skilled Work Force
5- Innovative Leadership
Weaknesses (W)
1- Low ARPU
2- Different Procedures Within T-Mobile US
3- Low Band Spectrum
Opportunities (O)
1- Acquiring high-quality spectrum
2- Increasing Market Share
3- New Technologies and Services

4- Coverage Expansion
SO Strategies
Acquiring high quality spectrum and coverage expansion would
support growth and increase quality service. Un-Carrier strategy
would support increasing market share.
WO Strategies
High quality spectrum and coverage expansion would help
increase profit and offset the decreasing ARPU
Threats (T)
1- Less diversification compared to competition
2- Interest coverage
ST Strategies
Innovative leadership and UN-carrier strategy would help
initiate diversification and stay competitive
WT Strategies
Acquiring low band spectrum and maintaining would help the
organization cover interest which in turn would minimize
Internal weaknesses and External Threats.
BCG Matrix
High
Stars
Customer Growth: 31% of wireless industry in 2016
Questions Mark
Subsidiaries and Wholesale: Aside from Metro PCS, other
subsidiaries are not growing as fast
Low
Cash Cows
Network Coverage
Dogs

None
High
Low
Relative Market Share
IE Matrix
Strong
3.0 to 4.0
Average
2.0 to 2.99
Weak
1.0 to 1.99
High
3.0 to
4.0
Grow and Build
Medium
2.0 to
2.99
Low
1.0 to

1.99
Space Matrix
Internal Strategic Position
External Strategic Position
Competitive (CA)
Industry (IS)
A
X
I
S
X
-1 Product Quality
-3 Market Share
-5 Brand Image
-1 Product Lifecycle
Average: -2.5
+6 Barriers to Entry
+6 Growth Potential
+5 Access to Financing
+4 Consolidation
Average: 5.25

Total axis X score=
2.75
Financial (FS)
Environmental (ES)
A
X
I
S
Y
+5 ROA
+4 Leverage
+6 Liquidity
+6 Cash Flow
Average: 5.25
-2 Inflation
-1 Technological Changes
-2 Competitive Environment
-2 Demand
Average: -1.75
Total axis Y score=
3.5

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