Breaking up is hard to do, but T-Mobile and Radio Shack seem to be handling the split rather well, all things considered. After Radio Shack alleged that T-Mo materially breached the terms of their agreement, the two have gone their separate ways. Or at least, they will on September 15. This is more of the awkward, still-living-together phase.
In the mean time, Radio Shack has moved on to the hot red head, signing a deal with Verizon. T-Mobile, on the other hand, is looking more like the desperate dumpee, hooking up with none other than the infamous and quite unexpected 7-Eleven. What a rebound, am I right?
While both parties attempted an amicable break, their public responses to the matter gave off another impression. Here’s what Radio Shack’s president and CEO had to say about it:
“The addition of Verizon Wireless, in combination with our existing carrier partners, positions us to now offer the best assortment of carriers, rate plans, devices and accessories for every consumer need.”
The best carriers, huh? So, T-Mobile wasn’t one of the best carriers? And you’re gonna rub your new relationship in T-Mo’s face? Low blow, Radio Shack… Low blow.
You can tell that things were getting pretty rough between T-Mo and Radio Shack in recent months, based on a statement made by then CFO Jim Gooch calling T-Mobile’s products “not competitive with other carriers.” Boom. And that was back in March when the two were keeping up the appearance of a healthy, committed partnership.
Then again, T-Mo hasn’t exactly taken the high road. It’s clear from the releases and the chain of events that it was Radio Shack who initially broke off the agreement. Whether it was actually about a contract breach, or simply poor sales disguised as a contract breach, Radio Shack dumped T-Mo. But T-Mobile has had trouble accepting that, issuing the following statement:
“After careful consideration, we decided that in order to increase the effectiveness of our retail network and in line with our sales strategy, T-Mobile will exit RadioShack retail locations, effective September 15, 2011. We are currently focused on higher return national retailer opportunities and we expect to announce new channel growth in the coming weeks, which will more than double the number of RadioShack doors currently offering T-Mobile products and services.”
Well, that statement is just loaded with coded resentment. According to this response, T-Mo was the one who decided to bounce out of there. After all, the pink carrier is interested in “higher return national retailers.” Which is no problem at all, because T-Mo will “more than double the number of Radio Shack doors” selling T-Mo gear. With 7-Eleven.
7-Eleven does have some experience selling prepaid phones and calling cards, and will add 8,800 new locations to T-Mo’s map. Still, that doesn’t really compare with the reach it had with Radio Shack, and T-Mobile will certainly need to rope in a few more partners before it can ever get back in the game completely. Plus, 7-Eleven won’t really aid in growing the T-Mo customer base, since no one will be signing any contracts in a gas station. Plus, the only phone being sold through 7-Eleven is the LG GS170, a basic flip phone that’ll go for $29.99.
But T-Mobile’s knight in shining armor is on its way. AT&T is in the midst of appeasing the FCC and the DOJ to get approval to officially acquire T-Mobile for $39 billion. While Verizon and Radio Shack seem to be totally over it, that tune may change when AT&T and its betrothed take the number one spot among national carriers.