T-Mobile USA CEO calls it quits after two years

Wed Jun 27, 2012 4:08pm EDT

Philipp Humm, CEO & President of T-Mobile USA addresses attendees during the International CTIA WIRELESS Conference & Exposition in New Orleans, Louisiana May 8, 2012. REUTERS/Sean Gardner

Philipp Humm, CEO & President of T-Mobile USA addresses attendees during the International CTIA WIRELESS Conference & Exposition in New Orleans, Louisiana May 8, 2012.

Credit: Reuters/Sean Gardner

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NEW YORK, June 27 - Barely two years after signing on as chief executive with T-Mobile USA, Philipp Humm is leaving the company and will be succeeded on an interim basis by Jim Alling.

T-Mobile USA, owned by German parent Deutsche Telekom, said on Wednesday that Humm was leaving for personal reasons to spend more time with his family - echoing the statement released in May 2010 when Robert Dotson announced he would be leaving and that Humm would take over.

The company said Alling, chief operating officer of T-Mobile USA, will take over the duties of CEO on an interim basis while a search is under way.

In a letter to employees - seen by Reuters - Deutsche Telekom CEO Rene Obermann said Humm had informed him of his decision in April and that Humm was leaving to join a competitor.

Talks with potential successors were promising, Obermann said in the letter.

Jefferies analyst Ulrich Rathe said the departure was unexpected. It likely did not "signal incremental operating difficulties," he noted, but might be taken as an indirect signal that Deutsche Telekom continued to look for a strategic solution in the U.S. such as a spin-off, an initial public listing or a merger or acquisition.

"We have long argued that notwithstanding current measures to stabilize the operating performance (including the rollout of high-speed LTE wireless technology), DT is working towards a strategic solution to the fundamental problem at T-Mobile USA: lack of scale driving sub-par returns," Rathe said in a note.

"Clearly, working as the CEO of an asset that is subject to such uncertainty would likely increase the attractiveness of competing career options," he added.

Humm faced a tough job when he took over from Dotson, who left after 15 years saying he wanted "to step away from the business to devote more time to family and to pursue new opportunities."

T-Mobile USA, once prized as Deutsche Telekom's growth engine, struggled so much with customer cancellations that the German company had been looking at new options for the unit ranging from buying competitor Sprint to an IPO.

Humm, who had a reputation as a turnaround specialist, might have been the right man for the job but his hands were essentially tied from March to December 2011 as the company waited for approval to be bought by AT&T.

In March 2011, Deutsche Telekom and AT&T announced that the U.S. carrier planned to buy T-Mobile USA for $39 billion but the deal eventually fell apart in the face of regulatory concerns.

The deal would have solved Deutsche Telekom's problems in the United States in one fell swoop. Instead T-Mobile USA was back at square one, leaving Humm to pick up the pieces.

Humm said in February he planned to reinvigorate T-Mobile USA with a $1.4 billion investment and reallocate spectrum in order to upgrade T-Mobile's service in 2013 with LTE technology.

He achieved part of that plan: On Monday, T-Mobile USA announced a spectrum deal with Verizon that gives the smaller carrier more access in areas in the country where it has been historically weak.

(Additional reporting by Peter Maushagen and Marilyn Gerlach in Frankfurt; Editing by Gary Hill and Richard Chang)

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