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June 28, 2012

CEO Phillip Humm quits T-Mobile USA, 48h later is at Vodafone Europe

Phillip Humm has announced that he has quit as CEO of T-Mobile's American operations, and less than 48 hours later has jumped straight into bed with Vodafone as its new Northern and Central European CEO.

By Allan Swann

The move is a bit of shock, given the time between resignation and appointment at Vodafone was allegedly just 48 hours.

Vodafone had long been looking for a European Manager, and it appears now that Group CEO Vittorio Collao has decided to split the role in two.

Humm gets the nice plush (relatively speaking) economies, and will oversee Germany, the UK, Netherlands, Ireland, Hungary, the Czech Republic, Romania – and oddly, Turkey (apparently now a part of central Europe).

"Vodafone is a powerful brand with a strong focus on the customer coupled with a clear strategy for growth. I look forward to joining the team," he said in a statement.

Humm’s family had stayed in Europe during his move to take over T-Mobile USA, and he said he was happy to rejoin them.

Deutsche Telekom chairman René Obermann thanked Humm for his contribution over the past seven years.

"Philipp Humm has given the company some important initiatives over the past years: Under his leadership the cost situation at T-Mobile USA has vastly improved and he led the company during a difficult phase regarding the planned merger with AT&T."

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"Now we need somebody who can convert initiatives into market-successes."

Humm’s tenure as CEO of T-Mobile USA was not without incident. The Deutsche Telekom subsidiary had struggled in the US market, where it is the fourth largest competitor. When Humm took over in 2010 its revenues were down $21bn from 2009, with income down $1.35bn. He since took a big share of the blame for the failed T-Mobile takeover by AT&T – which was a desired outcome for Deutsche Telekom.

The US Department of Justice ruled that it would ‘substantially lessen’ competition in the market, and rejected the takeover. Despite attempts to rework the arrangement, heavy resistance meant that AT&T pulled their bid in December 2011.

On top of the company’s $4bn infrastructure upgrade, Humm oversaw the sacking of 900 employees in May, on top of the 1900 in its call centres which it announced in March.

T-Mobile USA has announced Chief Operating Officer Jim Alling as the interim CEO while a replacement is found.

Paolo Bertoluzzo will now become Vodafone’s CEO of Southern Europe, which includes the less reliable economies of Spain, Portugal, Greece and Italy, with Albania and Malta.

Humm and Bertoluzzo will start their new roles on 1 October 2012, said Vodafone Group Chief Executive Vittorio Colao.

"Our new regional structure will underpin our strategy focused on meeting our customers’ long-term needs, and Paolo and Philipp will be strong additions to the Vodafone Group Executive Committee."

Collao has successfully divided Vodafone’s Europe into ‘the haves’ and ‘the have nots’, with regards to the European financial crisis. He can now spin Vodafone’s earnings reports to balance the positives and stability of Northern Europe, while firewalling off the travails of the troubled south in the Groups financials.

Ovum’s Emeka Obiodu, senior telecoms strategy analyst at Ovum believes the appointment will help solidify Vodafone’s troubled European accounts.

"Over the past 3 years, differing market developments have led to a divergence in the performance of Vodafone’s operations in northern and southern Europe. A poor economic outlook is weighing down operations in southern Europe whereas, in relative terms, the markets in northern Europe are doing ok," he said.

"It is thus, no surprise that Vodafone has gone for someone who has experience of managing operations in a mature European market. Having run T-Mobile Germany, Philipp Humm would have squared up with Vodafone’s largest market in northern Europe.

"Accordingly, his appeal is not so much for what he did or did not do during his time at T-Mobile USA, rather it is about getting someone who understands Vodafone’s northern European markets well, and someone who can hit the ground running from the start."

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