Long-time T-Mobile CEO to step down
John Legere, the chief executive officer of T-Mobile US Inc since 2012, was the public face of the company and its biggest cheerleader. He tirelessly promoted T-Mobile’s price promotions and gleefully bashed its rivals before his millions of followers on social media.
On Monday, T-Mobile announced that Legere would step down at the end of April after his contract expires.
The announcement comes at a crucial time for T-Mobile, which is moving closer to acquiring a smaller rival, Sprint Corp, to create a wireless carrier with more than 100 million customers, putting it within striking distance of Verizon Communications Inc and AT&T Inc.
T-Mobile and Sprint had earlier said that Legere would be the CEO of the combined company after the deal was completed. Instead, he will be succeeded at T-Mobile by Mike Sievert, T-Mobile’s president and chief operating officer who is now expected to become boss of the new company.
The merger, valued at $26.5 billion, is central to T-Mobile’s strategy to gain ground in an industry that is spending billions of dollars building out 5G cellular networks while engaging in intense price wars.
Legere, 61, has fashioned himself a new kind of telecommunications executive. He made public appearances costumed in the bright magenta colour that T-Mobile uses to market itself.
On Saturday, to bring attention to a cross-promotion deal with Taco Bell, he posted a photo of himself wearing a giant foam hat in the shape of a taco.
At T-Mobile, Legere was known for slashing prices, introducing new mobile plans and merrily calling out rivals Verizon, AT&T and even Sprint. (That was before the merger.)
His cut-rate pricing plans paid off, allowing T-Mobile to more than double its subscriber base.
His enthusiasm helped drive the acquisition of Sprint.
Legere used social media to talk up the plan since the two companies announced their intention to join forces in April 2018. He also played a strong role in lobbying lawmakers and regulators, an effort that included stays by him and other T-Mobile executives at the Trump International Hotel in Washington.
Although Legere has been the face of T-Mobile for many years, his departure was characterised by the company as part of a “comprehensive, multiyear, leadership succession planning process.”
Legere was characteristically jaunty in a Twitter thread on Monday, writing that he was handing “the magenta CEO reins” to Sievert. “You’ve heard me joke that he’s ‘my son,’ but in reality, since I hired him in 2012, @SievertMike’s been my mentee, my secret weapon and my friend.”
Sievert had been waiting in the wings. A provision in his employment agreement guaranteed that he would be paid as much as $58 million if there was a change in leadership at T-Mobile and the job did not go to him.
Despite a few bumps, the company’s acquisition of Sprint, which is controlled by SoftBank Group Corp of Japan, had been moving forward over the past two years.
In recent months it won approval by the Justice Department and the Federal Communications Commission after T-Mobile and Sprint agreed to sell off significant portions of their businesses to the pay-television operator Dish Network as part of a plan to create a potential new major wireless company.
But a significant hurdle remains: a lawsuit filed by attorneys general from 15 states and the District of Columbia who are trying to block the merger.
They argue that the reduction of major wireless carriers from four to three would inevitably drive up prices for cellphone customers and result in a significant loss of jobs. The deal cannot go through until the suit is resolved.
The trial is expected to start next month.
Because of the lawsuit, the original deadline for T-Mobile’s acquisition of Sprint has come and gone. In the meantime, T-Mobile has pushed to renegotiate the terms of the deal.
During this period of uncertainty, Legere was also considered for the job of CEO at another company controlled by SoftBank: the commercial real estate startup WeWork.
SoftBank recently bailed out WeWork, and Sprint’s executive chairman, Marcelo Claure, became WeWork’s executive chairman as part of SoftBank’s rescue effort.
The possibility of Legere’s move raised questions of a possible conflict of interest because of SoftBank’s role with both WeWork and Sprint, the T-Mobile merger partner.
On Monday, however, Legere said he had not talked to the company about the job.
“I was never having discussions to run WeWork, and because we had this announcement pending, I couldn’t say it but it did create a weird awkward period of time,” he said on a call with investors.