T-Mobile: Lowering the Bar for Us

In a report released today, Human Rights Watch issued a scathing indictment of Deutsche Telekom’s union intolerance practices in the United States.

The human rights watchdog report cites numerous instances of interference with the freedom of association by its wholly-owned subsidiary T-Mobile USA:

• Captive audience meetings
• Managerial threats
• Interference with handbilling
• Filming workers who accept flyers
• Interviewing techniques to weed out potential union sympathizers
• Managers asking workers to spy on other workers
• Advertisements for HR managers with “union avoidance” skills

The report notes that Deutsche Telekom touts its adherence to corporate responsibility, including international labor standards. The Real T-Mobile suggests the juxtaposition of what Deutsche Telekom advertises in its corporate branding and what T-Mobile delivers in its behavior in the U.S. shows a blatant hypocrisy.

Many of these labor rights violations took place at the Allentown, Pennsylvania, call center, the same worksite where CWA activists and local political figures recently tried to meet with management (click here  and here).

Photo:  Human Rights Watch

The Real T-Mobile has been reporting for months on T-Mobile’s plans for the next-generation network. While T-Mobile USA touts its HSPA+ build-out in several cities (click here for a recent article), most observers believe that the company needs to come up with a 4G solution in order to gain market share in the U.S.

So along comes yet another speculative piece in the Wall Street Journal. Sprint is the Number 3 wireless carrier in the U.S., T-Mobile is Number 4. Sprint has developed 4G capacity through Clearwire Corp., a joint venture in which it holds 54 percent. Clearwire is a provider of 4G Broadband services using the WiMAX technology, and its strategic investors include Sprint, Comcast, Google, Time Warner Cable, and Intel.

So Sprint has capacity and needs buyers, and T-Mobile needs capacity and is looking for a hook-up. Moreover, Clearwire also needs additional funding to build out beyond the 49 cities where it currently exists. The T-Mobile-Sprint dance has been the story line for other posts on this web site. (Click here  and here  for recent articles.)

The dilemma for Sprint: does it allow a competitor into Clearwire? It could do so in two ways: allow T-Mobile to become a purchaser of Clearwire service or allow it to become an investor. The real question is does the desire for investment exceed the desire to beat a competitor? Or does a more formal partnership solve the problem?

Click here for the full article.

Photo:  cote

Former T-Mobile employee Linda M recounted (click here and here) the attempt by CWA Vice President Ed Mooney, union activists, and local political figures to speak with top management at the Allentown call center on August 10 about the right of workers to freely choose a union. We have already produced one video (click here) of the encounter. A second video (click here) from Stephen Barron, Northampton County Controller, speaks in more personal terms about why management should drop the cold shoulder.

We have a third short video (click here) of Allentown Council President Michael D'Amore, recounting his attempt to speak with Brian Brueckman, T-Mobile USA Vice President, who was in the building at the time holding a "town hall" meeting. The rejection of dialogue by both local Allentown managers and corporate executives from T-Mobile USA was duly noted.

On paper, Deutsche Telekom has a very progressive policy on corporate social responsibility. It promises to adhere to the highest norms of international labor standards, corporate governance, and environmental stewardship. According to its web site, 

Deutsche Telekom is keen on assuming a leading role in the world in the area of
corporate Responsibility (CR), by setting binding targets and priorities for the
company’s social responsibility.

According to the 2010 CSR report  of the company, “We take responsibility.”

Deutsche Telekom has a funny way of “taking responsibility.”

Readers of this web site have seen recently that the labor part of DT sustainability is mocked on a daily basis by the active union intolerance of T-Mobile USA, its wholly owned subsidiary.

DT sustainability also appears to be toothless in terms of corporate governance.

The Real T-Mobile came upon an interesting blog entry from The Economist, pointing to apparent instances of corruption at Magyar Telecom, 60% owned by Deutsche Telekom and controlled by DT. The independent auditor revealed some pretty dicey contracts between managers and vendors whose purposes were “not readily apparent.”

Image from Deutsche Telekom's 2010 Corporate Responsibility Report

Readers of the Real T-Mobile know that the financial community has serious doubts about the direction taken by leadership at both Deutsche Telekom and T-Mobile USA. The performance of the American subsidiary is a subject of concern.

Now comes an interesting thought piece in the German financial newspaper Handelsblatt that takes a long view of the Deutsche Telekom investment in the U.S.

The article criticizes former DT CEO Ron Sommer for having bought VoiceStream in the first place – largely because of the debt legacy and the current drag on DT’s share price. It recognizes that DT was able to use T-Mobile USA as a cash cow for the first few years after the 2001 acquisition. Now, however, decisions need to be made because of weakening profit margins and the saturation of the American cell phone market.

The article reviews the network problems afflicting T-Mobile USA. T-Mobile needs considerable financial support to build its network to compete effectively with AT&T Mobility and Verizon Wireless.

Apparently, CEO Rene Obermann was willing to sell off part of DT to gain partnership in the U.S. In any case, DT is looking for a partner. Will it be Harbinger, Clearwire, or cable companies like Comcast or Time Warner?

Click here for the full German article.

Photo: Marco Bellucci