2nd UPDATE: Deutsche Telekom's T-Mobile USA To Replace CEO

T-Mobile USA, which has struggled with customer growth and heightened competition over the past year, will replace its chief executive next year with the person who helped to turn around its German operations.

T-Mobile USA said CEO Robert Dotson, who was in charge of the unit for 15 years, will step down from that post in February, to be replaced by Philipp Humm, chief regional officer of T-Mobile in Europe.

Humm, known for reviving T-Mobile's German operations as CEO through cost cuts and a focus on wireless data, brings significant experience in striking partnerships, including the recent U.K.-Orange joint venture.

While the move could rekindle speculation that parent company Deutsche Telekom AG (DT, DTE.XE) may unload the unit, DT continues to insist that it wants to keep T-Mobile USA.

The outgoing Dotson was largely responsible for making T-Mobile USA a national player in the U.S. wireless industry, but more recently he has been hampered by the slow upgrade to T-Mobile's third-generation network, the rise of smaller unlimited prepaid carriers, and a widening gap between T-Mobile and market leaders AT&T Inc. (T) and Verizon Wireless, a joint venture between Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD, VOD.LN).

T-Mobile earlier this month reported one of its worst first quarters of subscriber growth. While it lost 118,000 net contract customers, consistent with recent trends, it saw the number of net new prepaid customers fall 92% from the fourth-quarter, a startling drop that shows the strength of some of its other prepaid rivals. Even Sprint Nextel Corp. (S), which continues to lose its more valuable customers, showed strength in acquiring customers who aren't signed to contracts.

Societe Generale said Humm will be a "strong replacement" for Dotson as Humm has a "proven track record in cost cutting and improving margins--exactly what T-Mobile USA needs."

Humm also was instrumental in putting together the joint venture between T-Mobile's U.K. operations and Orange, a unit of France Telecom (FTE, FTE.FR). The joint venture was recently renamed "Everything Everywhere," and is expected to be able to better compete in the highly competitive U.K. market.

Deutsche Telekom said Wednesday that it remains committed to its U.S. business, which was subject to several market rumors in recent months, including the suggestion that Deutsche Telekom could sell or float the company. T-Mobile USA echoed the sentiment, while adding that it would focus on its network upgrade.

"Our strategy and focus remains true," spokesman Peter Debrow said.

Humm served as managing director of T-Mobile in Germany but stepped down in November 2008, taking responsibility for a massive breach of customer data. Data on around 17 million T-Mobile customers was stolen in 2006. However, Deutsche Telekom said at the time that there was no personal misconduct by Humm.

Humm will become president and CEO-designate of T-Mobile USA, effective July 1, and will take over the job of CEO in February. Dotson will continue as a T-Mobile USA non-executive board member until May 2011.

"It has long been my intent to step away from the business at this stage in my life in order to devote more time to family and to take on entirely new and unique challenges," Dotson said in a written statement. He couldn't be reached for further comment immediately.

Deutsche Telekom American depositary receipts recently fell 1.1% to $10.87.

-By Archibald Preuschat, Dow Jones Newswires; +49 211 13872 18; archibald.preuschat@dowjones.com

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