Deutsche Telekom puts its money where Legere’s mouth is

Deutsche Telekom T-Mobile Investment

T-Mobile CEO John Legere loves to talk trash about his rivals’ networks but recent studies have indicated that T-Mobile has some work to do if it wants to match the network quality of Verizon and AT&T. Thankfully for Legere, he has a sugar daddy in the form of parent company Deutsche Telekom that for the time being is willing to lay down the cash necessary to back up Legere’s boasts.

The Wall Street Journal reports that Deutsche Telekom this year is focussing much more on making long-term investments than short-term profits in the United States, which inevitably means that it will be spending more money investing in T-Mobile’s network and acquiring new customers in 2014.

“Instead of aiming for potentially higher adjusted Ebitda [earnings before interest, taxes, depreciation and amortization], Deutsche Telekom is continuing to focus on investments in customer acquisition and retention in the United States,” the company said earlier this week, which means that it’s seemingly onboard with T-Mobile’s strategy of gobbling up as many new subscribers as it can through its “Uncarrier” initiatives and becoming more profitable through sheer volume.

The key, though, will be how many new subscribers T-Mobile can attract. Deutsche Telekom is modeling net subscriber gains of between 2 million and 3 million this year, which certainly seems attainable since the “Uncarrier” added 869,000 net postpaid customers and 1.645 million total customers last quarter alone.

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