T-Mobile USA taps former Global Crossing head as CEO

Reuters News
Posted: Sep 19, 2012 11:29 AM
T-Mobile USA taps former Global Crossing head as CEO

FRANKFURT/NEW YORK (Reuters) - Deutsche Telekom AG named John Legere as the head of its T-Mobile USA unit, banking on the industry veteran and former head of network provider Global Crossing to turn around the struggling business.

The 54-year old, who also worked for AT&T and Dell, faces a battle to rebuild market share for the No. 4 U.S. mobile operator, which lost 205,000 customers during the second quarter.

T-Mobile USA has to compete with its much bigger rivals Verizon Wireless, AT&T Inc and Sprint Nextel as well as smaller contenders like Leap Wireless and MetroPCS in the competitive U.S. wireless market.

Legere's predecessor Philipp Humm left T-Mobile USA in June, barely two years after signing on as chief executive.

Before he left, Humm had been struggling to get T-Mobile USA back on track after nine months of distraction in 2011 when the company focused on seeking regulatory approval for its proposed sale to AT&T.

Deutsche Telekom last year tried to sell its U.S. business, once a strong growth engine, to AT&T for $39 billion, but fierce regulatory opposition scuppered the deal, leaving the German company with a $6 billion breakup package.

Legere, an avid marathon runner, was widely credited with helping Global Crossing emerge from a high-profile bankruptcy in 2003 and transforming it into an internet services company.

Global Crossing was bought last year by peer Level 3 Communications for $1.9 billion.

Legere will have to speed up network upgrades as T-Mobile USA is behind its biggest rivals in offering high-speed wireless services. It is expected to kick off its Long Term Evolution (LTE) services in 2013.

Over the next two years, Deutsche Telekom has said it will increase investments at T-Mobile USA by about $1.4 billion. Over time, T-Mobile USA will spend a total of $4 billion on upgrading its network for high-speed LTE wireless services.

In the fourth quarter, T-Mobile USA's competitive challenges may be compounded by the fact that it does not have an agreement with Apple Inc to sell the company's latest iPhone, which hits store shelves on September 21, the day before Legere's official start date at T-Mobile USA.

Apple booked orders for more than two million new handsets 24 hours after the company announced the iPhone 5.

(Reporting by Harro ten Wolde in Frankfurt and Sinead Carew in New York; Editing by David Holmes and Andrew Heavens)