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T-Mobile CEO Mike Sievert's contract punishes him if he leaves the job early
T-Mobile CEO Mike Sievert's contract punishes him if he leaves the job early

Phone Arena

time13-06-2025

  • Business
  • Phone Arena

T-Mobile CEO Mike Sievert's contract punishes him if he leaves the job early

Focusing on technology, media, and telecom, MoffettNathanson is an equity research firm. Analysts with this firm met with T-Mobile 's senior management this week. Normally, this might not have been a good week for the analysts to sit down with T-Mobile executives as there was talk about current CEO Mike Sievert leaving the carrier before his contract expires. There is talk of Sievert leaving early at the end of this year or next year. Despite such a huge distraction, T-Mobile impressed the analysts with its focus on its core mobile business. While T-Mobile has side businesses that it is involved in such as fiber and fixed wireless access (FWA), analyst Craig Moffett feels that these businesses take away from the carrier's focus on delivering the best network to consumers at the best price because they deliver a very small percentage of company revenue. T-Mobile CEO Mike Sievert is contemplating leaving before his contract expires. | Imagfe credit-T-Mobile In a note to clients written on June 10th Moffett said, "We've periodically criticized T-Mobile for what we might call 'distractability,' or a focus on ancillary issues like a fiber strategy that covers less than 2% of the country, or even an FWA strategy that accounts for just a few percentage points of revenue. "Far more important, and sometimes lost amid these 'distractions' is, in our view, the core of T-Mobile 's value proposition: the best network at the best price." The analyst believes that T-Mobile has a unique advantage having the best network and the best pricing. Speaking with current CEO Mike Sievert, Moffett says that the man who replaced the legendary John Legere as Chief Executive neither confirmed nor denied the rumors about his early departure from T-Mobile . His comments were limited to quips like, "I love my job," "This team loves working together," and "It is unproductive to comment on the press." It should be pointed out that Sievert's contract with T-Mobile is public knowledge which is something that the CEO pointed out at the meeting. Sievert must give 12 months written notice if he plans on leaving at the end of the 5-year term, or April 1, 2028. He would receive "substantially the same compensation and benefits as he would receive in a qualifying termination." If his proposed retirement date is on or after April 1, 2026, but before April 1, 2027, he would have to provide at least 12 months' written notice to the Company but receive only 60% of his retirement compensation. He will receive 75% of his retirement compensation if he proposes to retire on or after April 1, 2027, but before April 1, 2028. Again, he would have to provide the company with at least 12 months' written notice. Would Sievert be willing to give up one penny of his retirement compensation to leave early? The man that will supposedly replace Sievert as T-Mobile CEO is the carrier's COO Srini Gopalan who also sat in the conversation with MoffettNathanson's analysts. Gopalan reminded the analysts that even though he is new as a T-Mobile insider, he has been a member of the company's board since 2021. He also ran the German operations of T-Mobile 's parent company, Deutsche Telekom. The bottom line according to Moffett is " T-Mobile sounds to us to be fully re-focused on what matters most: taking share from AT&T and Verizon in mobile." Another important part of the meeting was a discussion on how T-Mobile will use AI to anticipate and prevent customer pain points. Moffet said that the controversial T-Life app is part of this strategy as it has become the most downloaded mobile app over the last few weeks even topping TikTok. 20 million active T-Life users are engaging with the app seven to eight times per month. Since it is used to upgrade to more expensive plans, T-Life could be generating big-time revenue for T-Mobile . Other interesting things that came out of the meeting according to MoffettNathanson's report: If EchoStar sells off its spectrum, T-Mobile , AT&T , and Verizon would each concentrate on obtaining more capacity for their preferred bands. This would amount to only 15% of the amount of airwaves currently owned by T-Mobile , AT&T , and Verizon in their preferred bands. T-Mobile 's preferred bands include 2.5GHz mid-band and 600MHz for low-band. T-Mobile 's Starlink partnership has 600 satellites in orbit putting them ahead of the competition. National parks are where most of T-Satellite's traffic comes from with 500,000 square miles of the U.S. that cannot be covered by cellular towers in those parks. Switch to Total 5G+ Unlimited 3-Month plan or Total 5G Unlimited and get a free iPhone. We may earn a commission if you make a purchase Buy at Total Wireless

Apple's growing list of problems clouds AI reboot
Apple's growing list of problems clouds AI reboot

Mint

time07-06-2025

  • Business
  • Mint

Apple's growing list of problems clouds AI reboot

It says something about Apple's current status that its trailing position in artificial intelligence isn't the company's biggest problem. It might seem to be next week, though. Investors are glum ahead of Apple's Worldwide Developers Conference that kicks off Monday. The stock has slid 20% since the first of the year, which is the worst run the shares have experienced ahead of the company's WWDC event since at least 2010. Apple's big tech peers now use their own annual developer events almost exclusively to tout their progress in AI. But Apple's conference this year is expected to mainly demonstrate how far behind the company is in what is considered a once-in-a-generation technological shift. The Apple Intelligence service introduced at last year's conference is still a work in progress, and the Siri digital assistant is still awaiting a promised AI makeover. That won't be coming next week, at least based on a rare admission Apple made three months ago that its planned Siri upgrade was taking longer than expected. 'Apple will be much more cautious about overpromising and will refrain from showing features that aren't yet ready for prime time," Craig Moffett of MoffettNathanson predicted in a report Thursday. But AI is only one of the significant problems Apple is facing now. Tariffs threaten the profit margins of the company's hardware business. And the president of the U.S. is openly pressuring Apple to effectively undo its two-decade-old business model of exclusively producing its devices overseas. Then there is services, which drive an outsize portion of Apple's bottom line. Legal challenges hang over the fees the company earns from app developers, as well as the payments it receives from Google to make the search engine the default option on Apple's devices. Those fees and payments together comprise a substantial part of Apple's services arm that generates annual gross profit margins of 74%—twice the margins the company's device business commands. 'We caution that Apple has material risks to its revenue growth, margins, and valuation multiple," Needham analyst Laura Martin wrote in a report on Wednesday, where she downgraded the stock to a 'hold" rating. Against the risk of tariffs, App Store fee reductions and the loss of Google payments, Apple's slow start in AI seems almost a minor worry. The company hasn't been marketing Apple Intelligence as a premium service that would cost users extra—a notable contrast to the approach of Microsoft and Alphabet's Google, which are charging money for most of the generative AI tools sold to their customers. But Apple needs to give customers more reasons to buy its devices, and upgrade them more frequently. Its flagship iPhone business has been in a rut, with revenue growth relatively flat over the past two years and expected to be flat again for the current fiscal year ending in September. The lack of new AI offerings is expected to weigh on the next cycle as well, with Wall Street expecting iPhone revenue growth of only 3% in fiscal 2026, according to FactSet estimates. 'We believe that, for this stock to work, it must have the catalyst of an iPhone replacement cycle, which we do not foresee in the next 12 months," Needham's Martin wrote in her report. Apple has a lot of very loyal customers—more than 2.35 billion active devices make up its installed base—who won't necessarily bail over a single piece of missing software. But the company that disrupted the smartphone market could be disrupted itself if generative AI creates a new class of devices that obviate the need for a touch screen slab in everyone's pocket. OpenAI just nabbed Jony Ive, the famed Apple designer who crafted the original versions of most of Apple's current product line, as part of an ambition to eventually ship 100 million 'AI companions." The first devices are expected to come out next year. The famously secretive Apple could very well spring some of its own surprises by then. But it will have to do so while juggling its global supply chain and deftly navigating the legal challenges to its App Store fees and Google payments. Apple isn't even officially a party to the Google case, which might limit its options to shape the outcome. Apple's slow start in AI is a problem, but compared to its other challenges, at least it is more under its control.

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