INTERVIEW-T-Mobile UK says customer momentum continues

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Wed Mar 18, 2009 4:02am GMT

* T-Mobile UK says it won more customers at start of '09

* Launches new 40 pound calling plan, incl unlimited Web

* Says new plan can be profitable

By Georgina Prodhan

LONDON, March 18 (Reuters) - T-Mobile continued to win customers in Britain in the first months of this year after reversing a decline in 2008, the head of its contract-customer business in Britain told Reuters.

Steve Mitchell, head of the post-pay division at Deutsche Telekom's (DTEGn.DE) T-Mobile UK, said an attack on the market in the second half of last year had brought a turnaround whose momentum was continuing.

"We have carried it on in the first couple of months of the year," he said in a telephone interview ahead of the launch of a new 40 pounds ($56) a month flexible calling package including unlimited mobile Internet access.

T-Mobile is the second-smallest of five mobile network operators in Britain's crowded market and had 16.8 million customers at the end of 2008, a fall of 3 percent from 2007.

"We're the first guys to recognise that we're still a challenger in this market, particularly in the economic climate we're in," said Mitchell.

Britain's mobile market is led by Telefonica's (TEF.MC) O2 and Vodafone (VOD.L), with T-Mobile vying for third position with France Telecom's (FTE.PA) Orange. Hutchison Whampoa's (0013.HK) third generation-only operator 3 is the smallest.

Mitchell said the new tariff, a new version of T-Mobile's original Flext tariff of 2006, would cater for the changing ways in which customers used their mobiles -- often dispensing with fixed lines -- and should boost customer numbers.

The new package launching on Wednesday allows customers to include selected international calls and texts, calls to national-rate numbers used by many customer-service departments, and retrieval of voice mail towards their inclusive minutes.

Customers signing up before the end of June will also receive unlimited mobile Internet access as part of the plan.

T-Mobile says the 40-pound plan includes 225 pounds' worth of value, but Mitchell said he would not have to sacrifice profitability to win customers.

"Absolutely, it can be profitable," he said.

Some network operators have caused investors to be concerned with flat-rate plans for data in particular, which have proved effective in attracting customers and boosting data usage but could turn out to be more expensive than planned.

T-Mobile USA, the fourth-biggest mobile phone service in the United States, said last month it was testing a $50 per month unlimited calling plan to long-time customers in San Francisco, following a similar offer from a unit of Sprint Nextel (S.N).

(Reporting by Georgina Prodhan; Editing by Bernard Orr)

((georgina.prodhan@thomsonreuters.com; +4420 7542 7954; Reuters Messaging georgina.prodhan.reuters.com@reuters.net))

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