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Monday, February 20, 2006 - Page updated at 12:00 AM

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T-Mobile units seek to forge stronger alliance

Seattle Times technology reporter

BARCELONA, Spain — Until recently, T-Mobile USA and T-Mobile International had two things in common: a name and a magenta-pink brand-color scheme.

At last week's 3GSM World Congress, a global conference in Barcelona that drew some of the biggest names in the wireless industry, T-Mobile International's chief marketing officer said that's changing.

During an interview, Ulli Gritzuhn detailed how Bellevue-based T-Mobile USA and T-Mobile International, both subsidiaries of the Bonn, Germany, telecommunications giant Deutsche Telekom, have started to work closely together as recently as in the past six months to negotiate discounts on handsets and share perspectives on the industry.

As part of the T-Mobile International family, the U.S. operation is the fourth-largest carrier in this country. It was created when Deutsche Telekom purchased VoiceStream, based in Bellevue, in 2001.

Since the acquisition, the U.S. group continues to be a highlight of T-Mobile International's growth. By the end of last year, T-Mobile USA had expanded its customer base by 25 percent for the year, to 21.7 million subscribers.

T-Mobile International, which includes operations in Britain, the Netherlands, Hungary and other nations, has about 80 million wireless subscribers in all.

For the U.S. company, combining efforts may help close some of the gap between it and its bigger rivals, which have grown even faster as a result of the consolidation that settled into the wireless industry over the past several years. Having a wider base could bring advantages of economies of scale to T-Mobile USA.

Gritzuhn said that until the last year, USA and International hadn't collaborated much because interactions could be strained.

"When headquarters calls and they tell you how to run your business, it's not inspiring and can be considered somewhat threatening," he said.

Instead, the parties have tried to make the interactions go both ways. "At times, we give and at times we take," Gritzuhn said.

More broadly, that manifested itself in personal meetings between executives and jointly negotiating handset deals with manufactures.

Together, the systemwide subscribers purchase about 38 million devices a year, which may help drive bulk discounts. In comparison, Cingular Wireless, the largest carrier in the U.S., has 54 million subscribers.

The notion of working as global partners started last year at CeBIT, an annual technology conference in Hanover, Germany.

Gritzuhn said — for what he believes was the first time — that the two parties sat down together for a meeting with a device manufacturer.

Based on the success there, he said they decided to attend every meeting together at 3GSM.

"The total global team is speaking with one voice," he said. "Combined we are a very large buyer globally."

Mike Butler, T-Mobile USA's chief marketing officer and Gritzuhn's counterpart, agreed. "The bridge joining us is one powerful international brand fueled by the exchange of ideas, best practices and resources," he said by e-mail.

Gritzuhn said he met Butler for the first time three or four months ago and now expects to meet at least two times a year going forward.

One recent example of sharing ideas is the recent launch of two devices: the MDA and the SDA, developed by Taiwanese handset maker HTC.

Gritzuhn said the idea for the Wi-Fi-enabled phone and handheld device came from the U.S., but they were first launched in Europe. T-Mobile started selling them in the U.S. last week.

He said T-Mobile International has also started to learn from USA about customer service.

T-Mobile USA has topped the J.D. Power and Associates' Wireless Customer Care Performance Study for three straight reporting periods. During a presentation at 3GSM, T-Mobile International committed itself to developing a new approach to customer service.

"The U.S. business is built on service, going back to the VoiceStream days. We are learning a lot from that," Gritzuhn said.

What T-Mobile International has given back to the U.S. is its expertise in rolling out new high-speed networks, the next step in technological progression after 3G, the third generation of cellular technology.

T-Mobile International expects to go live with HSDPA in March in Germany, Austria and the Netherlands.

The U.S. company expects to launch 3G in 2007.

When it does, Gritzuhn said T-Mobile International will be there to share what it has learned.

"T-Mobile USA is a very big part of the business, and we are aligned in what we do," he said.

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

Copyright © 2006 The Seattle Times Company

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