Much of the focus on T-Mobile USA’s
turnaround efforts has been on its LTE launch and rebranding.
But beyond the new mobile broadband
service and the symbolic change of its spokeswoman’s wardrobe lies the front
lines – its retail stores.
T-Mobile is moving aggressively to open
more brick-and-mortar locations. A big part of its strategy is what it calls
its “T-Mobile Premium Retailer” program, or TPR, an initiative that
started in 2007 to allow outside companies to run T-Mobile-branded retail
The locations run through the Premium
Retailer program are identical in appearance to stores owned by T-Mobile.
That’s a big difference from independent dealers, who typically go with their
own store formats.
To a lay person, there’s no way to
distinguish between a store owned by T-Mobile and a store operated by a third
party through the TPR program – same employee dress code, same training, same
inventory, same internal systems.
The only difference is that they’re
owned by entrepreneurs with knowledge of the local market instead of corporate
employees in far-off offices.
At the beginning of 2011, T-Mobile had
450 stores operating through the program. It opened 375 locations last year
during the turmoil of the proposed AT&T merger and is on track to open
another 375 stores this year. It passed the 1,000 mark this week with the
opening of a store in Pompano Beach, Fla.
By the end of 2012, it plans to have
1,200 TPR stores nationwide. That’s more than one-third of the 2,000
company-owned locations it expects to have open by year-end.
Michael Sentowski, vice president of
national dealer programs, said in an interview that before the TPR program got
started, T-Mobile was “lacking distribution.”
“Our competitors had a stronger
foothold in branded distribution,” he said. “We felt the best way to
get there was with third-party partners.”
Sentowski said the retail stores that run
through T-Mobile’s Premium Retailer program are integral to the operator’s
“It all comes down to driving churn
down and loyalty up,” he said. “We’ve got to continue to build stores
where our customer base is. That’s something we’ve been lacking.”
T-Mobile has been adding TPR stores at a
faster clip than company-owned stores. An average of 240 TPR stores have been
opened each year since the program got its start, compared to an average of 100
company-owned locations opened each year.
Neither Sentowski nor a T-Mobile spokeswoman
could comment specifically on the program’s financial benefit to the operator
nor could say how much autonomy store owners had when making decisions.
Carl Ducato, president of TPR
participant Catcorp, told Wireless Week it was “obvious it was going to be
very successful” when he sat down with T-Mobile to discuss the program.
The initiative was so compelling that
Catcorp decided to exit its businesses selling phones for other providers and
make T-Mobile its exclusive focus.
Ducato declined to comment on specifics
of Catcorp’s contract with T-Mobile, but said Catcorp gets paid on commission
for products and services.
Since it opened its first
T-Mobile-branded stores in June 2009, Catcorp has added about 40 additional
stores in the Miami, Atlanta, Tulsa, Wichita, Kan., and Springfield, Mo.,
“We’re committed to growing our
business,” Ducato said. More store openings are planned for later this
year as part of T-Mobile’s broader expansion efforts.
T-Mobile is also in the process of
remodeling both company-owned and TPR stores. It overhauled 700 stores in 2011
with a new design and will remodel the remainder of its locations this year.
T-Mobile may be in the midst of a major
retail expansion, but that doesn’t mean it’s indiscriminate in where it opens
new stores. Like other operators, it has detailed specifications for where new
sites should be located.
According to documents provided by the
operator, potential sites should be located near shopping centers serving
minimum populations of 75,000 within three miles of the store.
High-traffic areas with car counts
between 25,000 and 50,000 per day are “ideal,” and T-Mobile prefers
areas with a strong residential and daytime population with a median household
income of $40,000 or more. Other characteristics
sought in a potential site include shared parking, signage, and square footage
between 1,000 to 2,500 square feet with at least 20 feet of frontage.