UK: Discussion: what should T-Mobile do?

T-Mobile (NYSE: DT) have brought us some notable occasions over the past 12 months or so – firstly, a very good mobile broadband offering, second an extremely memorable ‘FlashMob’ advertising campaign, and thirdly the Google (NSDQ: GOOG) G1. But none of these instances have managed to help the company that is now 4th out of 5  in terms of Operator market share in the UK.

It’s rumoured that in fact T-Mobile might exit the UK the altogether, or alternatively merge with the 5th largest Operator, Hutchison Whampoa’s 3UK. Those options aside, T-Mobile might choose to tough it out and see if they can increase market share – but the UK is one of the most competitive markets globally – with a penetration rate that means Operators can only grow by taking other Operators’ shares (and reducing churn obviously).

The two big boys in the UK, O2 (NYSE: TEF) and Vodafone (NYSE: VOD), have millions more subscribers than T-Mobile (and 3UK), and this presents T-Mobile a range of difficult options, as outlined above – question is, what should they do?

An exit of the market could certainly be the most traumatic for T-Mobile and it’s subscribers, and a merger could end up being the most expensive option (I don’t even want to think about the logistics involved!). But do our readers have a different view on what should occur?

Personally I think the current economic situation, combined with the rock-and-a-hard-place position of T-Mobile means that the time could be ripe for an exit, particularly if financial results continue to be less than stellar – parent company Deutsche Telekom (NYSE: DT) will surely put some decisive action in place in the coming months…