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11/8/2007
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T-Mobile Hedges Its Bets With Apple's iPhone And Google's Android

Parent company Deutsche Telekom is in a good position to capitalize on the iPhone launch in Germany and worldwide with Google's Open Handset Alliance.

With the iPhone scheduled to make its debut in Germany Friday, anticipation is high as would-be subscribers line up. No one is more excited -- or in a more interesting position -- than Deutsche Telekom's chief executive Rene Obermann whose firm has exclusive rights in Germany to market the iconic phone.

It's a paradoxical position for Obermann, who was a featured figure earlier in the week at Google's unveiling of its Android cell phone platform, which is likely to produce mobile phones and services in a few months to compete with Deutsche Telekom's iPhone

In Germany, Obermann waxed ecstatic over the prospects for the iPhone.

"We're not giving out precise forecasts, but registrations on our Web site lead me to believe (the holiday season) will be a strong sales period," he told the press this week. "The real question for me is whether we have enough devices and can meet customer demand."

The sentiments were an echo of Obermann's statements in the United States on Monday, which focused on Deutsche Telekom's participation in Google's Open Handset Alliance and future phones and services based on Android.

"Google has been an established partner for T-Mobile's groundbreaking approach to bring the mobile open Internet to the mass market," Obermann said at Monday's Android announcement. "We see the Android platform as an exciting opportunity to launch robust wireless Internet and Web 2.0 services for T-Mobile customers in the U.S. and Europe in 2008."

While there are no precise plans yet for Android phones, Google has long argued that its "open" platform will lead to better and less expensive phones.

Deutsche Telekom is in a good position as it has the iPhone locked up for Germany. And even though it is locked out of the U.S. market, because AT&T has exclusive rights to Apple's phone there, Deutsche Telekom's T-Mobile USA unit, however, could market Android phones.

Obermann is not the only prominent high tech executive to straddle the world between Apple's iPhone and Google's Android: Google's chairman Eric Schmidt is a member of Apple's board of directors.

Service plans for the iPhone in Germany are expected to begin at an expensive Euros 49 ($72) a month for a minimum plan and significantly more for more elaborate plans. Deutsche Telekom's T-Mobile operation has a heavy commitment to Wi-Fi -- likewise an important feature of the iPhone -- and is an important selling point for iPhone users.

The iPhone is also scheduled to debut in the U.K. Friday.

In a related development, Obermann had much to cheer about over T-Mobile USA's third quarter results released Thursday.

The U.S. unit added 857,000 net new customers in the quarter, bringing its total subscriber rolls to nearly 28 million. The U.S. unit said service revenues rose to $4.33 billion from $3.72 billion in the third quarter of 2006. Net income in the third quarter of 2007 was $526 million, gaining over the second quarter's $350 million figure. Comparisons with the previous year's third quarter were not relevant, because of complicated tax issues.

"T-Mobile USA continues to build on its role as a key component of Deutsche Telekom's strategy to grow abroad with mobile," Obermann said.

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