T-Mobile Makes Big Retail Push

BELLEVUE, WA-It may be delicious irony, but T-Mobile is growing a wireless communications business with a land-based strategy. The fourth-largest cellular phone carrier in the United States is engaged in a rapid expansion plan for its new T-Mobile limited [sic] stores, with plans for 1,500 new units in the next two years.

Not a franchise strategy, T-Mobile limited allows experienced entrepreneurs the opportunity to own and operate their own stores, while participating in a consolidating industry.

“When cellular first came out, it was crazy, very fragmented,” says Lesley Hawks, manager of T-Mobile’s partner acquisition. T-Mobile currently serves 31 million customers in the United States for an 11% market share. As the industry has matured, carriers realize the need for more presentation and education to the consumers.

T-Mobile already has more than 2,000 stores, but is now looking to expand in this new, colorful, more interactive format. All locations have live handsets for customers to test, bill payment capability, onsite activations and trained customer service experts. The new stores are part of a major branding strategy.

“We have committed the last year to cleaning house, to present our customer with a seamless experience,” Hawks said.

The stores are not franchises, in which the “owner” pays fees and royalties; nor are they sole proprietorships like some cellular stores that sell multiple brands. Instead, T-Mobile limited’s structure combines the two, offering ownership with a solid structure, the company says.

T-Mobile will help the owner with site selection and store layout, as well as store build-outs for qualified owners, and financial and creative assistance with local advertising. The corporation conducts the national campaigns–Academy Award-winning actress Catherine Zeta-Jones has recently been brought back as a spokeswoman. Marketing, sales and business operations specialists also are available on an ongoing basis to offer help.

This is not an opportunity for a budding entrepreneur. T-Mobile is seeking experienced franchisees with success in other retail operations and at least $125,000 to $175,000 per store in liquidity. Full business and marketing plans will be required, and key T-Mobile personnel will interview each potential owner. Approved retailers then complete an orientation/training program, and have access to additional Internet-based, self-paced product and sales courses. In addition, T-Mobile provides in-store training and ongoing on-site support.

The program was launched in October 2008 with existing T-Mobile dealers, and has grown to 200 stores, divided evenly among conversions from existing T Mobile stores, new owners and existing cellular store providers.

“We’re looking for mature entrepreneurs who can commit to 10 to 20 stores,” Hawks says. “We need another 1,500 of these things in the next two years.”

At a time when landlords are looking for new chains, it might seem that wouldn’t be a problem. But the challenge in fact is not in finding potential owners, but in finding locations, Hawks says.

“We need competitive spaces,” such as an end-cap next to a grocery, Hawks says. Sites will be found the old-fashioned way, by an in-house team of real estate professionals pounding the pavement. The company has no exclusive broker arrangements and will work with any landlord.

T-Mobile also is continuing its other distribution strategies, including Radio Shack. But T-Mobile limited is the major expansion strategy.

“I’m doing regional shows, and more information is available on our website, www.t-mobilelimited.com,” Hawks said. “We’re committed to retail.”