T-Mobile CEO Rekindles Sprint Merger Speculation At the tail end of yesterday's CES announcements, T-Mobile CEO John Legere did yeoman's work rekindling rumors of a looming Sprint and T-Mobile merger. In the Q&A session after the presentation, Legere was asked specifically about the merger, and said it was "a potential future outcome" of a new administration and "friendlier regulatory environment." At one point Legere stated that it was "pretty clear Sprint needs to do something."

Softbank Chair Masayoshi Son thinks that something is a T-Mobile merger, so he's been trying to sell the incoming Trump administration on the idea. Son's first attempt at the merger was blocked in 2014 by regulators because it would have reduced overall sector competition. He has repeatedly made it abundantly clear he'd like to try again. Legere is of course not the final word on such a deal. That would be T-Mobile owner Deutsche Telekom, which over the year has made it abundantly clear it would like to exit the U.S. wireless market. That said, T-Mobile's success means that a merger would be notably more expensive than the last time Sprint/Softbank tried. "Sprint themselves is like an exploding plan," said Legere. "They're making progress but they pretty clearly have a ways to go. So in the future structure of the industry, there are a number of people who think, well, it may make sense from a scale standpoint to consider the coming together of T-Mobile and Sprint." Legere largely however gave non answers, making it clear that a Sprint merger could certainly happen, but effectively leaving things at that. "We will consider continued strong individual growth as a company or various forms of consolidation around our brand and platform of growth," claimed the CEO. "And so that you pretty clearly have to say that is one of many potential future outcomes of the industry structure." "We will consider continued strong individual growth as a company or various forms of consolidation around our brand and platform of growth," claimed the CEO. "And so that you pretty clearly have to say that is one of many potential future outcomes of the industry structure."







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Most recommended from 49 comments

tegelad

join:2002-09-18

Whitesboro, TX 9 recommendations tegelad Member In this instance the merger makes sense ... They could combine the coverage footprint, which would enhance their availability and performance. In my example in Northern Texas, there are parts both are strong and weak, and the combined service would provide a strong/stellar performance. After this though with 3 major providers, I think mergers of the mega style should be blocked.

Anon9d7e4

@netelligent.ca 5 recommendations Anon9d7e4 Anon Sounds like another Sprint disaster This is already a deja vu ... Sprint Nextel...

You would think investors got the idea, but no...Let's repeat this experience and have better results this time.

Right .... Taget

join:2004-07-29 4 recommendations Taget Member A merger nobody needs.

First any notion of T-Mobile being the dominant partner is fantasy. The new company is not going to pay DT money year after year to continue licensing the T-Mobile name. They may or may not use the name Sprint. But it won't be T-Mobile. Softbank will be the one acquiring the new company and merging the two companies together (regardless of whether one technically buys the other for tax reasons). They and specifically Masayoshi Son will be the one calling the shots. Regardless of whether John Legere on in some capacity. Even as CEO. It would not be in Softbank's nature to give John Legere the same degree of independence DT gave him.



Second merging them together is not easy. They will try to avoid the CDMA / GSM conundrum by saying they will go completely LTE. Which is all fine and good since theoretically every company wanted to be VOLTE only by now. It just never seems to get there with the technology still maturing. And you have 5G coming right around the corner. Realistically they are going to carry over both CDMA AND GSM for years to come. A waste of money and resources.



Third and most importantly Softbank Sprint wants T-Mobile so they can avoid spending money on upgrading their own network. The new company will be deeply in debt, highly leveraged, and devoting most of their attention on putting the new two companies together. This means you should pretty much forget about all that meaningful of a 5G deployment. It may be able to offer improved LTE in some areas but it will be a company hopelessly behind AT&T and Verizon in offering next generation services.



In short it will takes us from four carriers to two and a half carriers. With a realistic scenario of the merged company be so weak it will be swallowed by one or both of the other two.



Also if Sprint fails to acquire T-Mobile don't discount the possibility of AT&T buying T-Mobile.

karpodiem

Hail to The Victors

Premium Member

join:2008-05-20

Troy, MI ·WOW Internet and..

·Comcast XFINITY

3 recommendations karpodiem Premium Member Sprint can't afford to buy TMUS Even with debt, to buy TMUS would cost Sprint $80-90 billion they don't have.



Legere is just saying this to meet his (ongoing) fiduciary responsibility to TMUS shareholders. The only entity I could think that would be able to pull this off would be Comcast - it fits the triple play; content creation ownership (NBC), physical infrastructure (Comcast), and mobile (TMUS).



But last I heard Trump is still against the ATT/Time Warner merger, although he asked Murdoch for an FCC head recommendation - Murdoch doesn't strike me as a guy that would be against the ATT/Time Warner merger though. The next few weeks should be interesting. NObama

Premium Member

join:2005-11-09

Nashua, NH 2 recommendations NObama Premium Member Bad for America More competition benefits Americans in EVERY way. Reasons to be against it - 1) Less competition = higher consumer costs for longer periods of time, 2) Job losses. Many thousands of direct jobs will disappear, because Sprint operates an entirely different network than T-Mobile. Also, one of the two networks would shut down completely, almost certainly Sprint's network. The effects of this would be the loss of billions in CAPEX spending every year, and the tens of thousands of high paying jobs in the wireless infrastructure deployment industry that rely on those dollars. Those jobs will NEVER come back, and neither will the spending. There is no benefit to Americans from combining these companies. I have worked in this industry since the late 1980's, and seen first-hand how bad mergers are for industry workers and average Americans.