T-Mobile sprinting to finish line
CEO and COO talk about potential merger.
T-Mobile USA CEO John Legere has surfaced as the possible new CEO at WeWork, where he would follow the troubled tenure of co-founder Adam Neumann. The Wall Street Journal reported that Legere is in discussions with the office-sharing startup, which was bailed out recently by SoftBank Group.
The topic of succession at T-Mobile came up during a sit-down Legere had with USA TODAY last week, fresh off the announcements that T-Mobile would be flipping the switch on its 5G network on Dec. 6, Legere was joined in the conversation by T-Mobile president and COO Mike Sievert to discuss the remaining obstacles to T-Mobile’s pending merger with Sprint and to make the case that the merger will result in more, competition, and more jobs. SoftBank already holds a major stake in Sprint.
The Journal article stated that there’s no guarantee Legere would take on the WeWork challenge.
Though the T-Mobile-Sprint deal has been blessed by both the Justice Dept. and Federal Communications Commission, a number of states attorneys general have sued to block the merger, with a trial set to begin Dec. 9.
“We announced at the time of the (Sprint) transaction that we were prenaming me CEO and Mike as president and COO, Legere said. “We certainly also thought that the deal would be done a year ago.”
Legere went on to joke that “if this transaction goes on 10 more years, I’ll be in my 70s.” And while WeWork never came up, Legere said that when it comes to new T-Mobile, “There’s always a lot of good strong speculation about succession and things.”
The conversation, edited for clarity and brevity, also touched on newly announced initiatives that are contingent on merger approval: a prepaid $15 a month budget offering, and plans to give away internet access to first responders, and low-income families with schoolage kids.
Question: Where do things currently stand with the states?
Legere: We’ve recently had two states withdraw from the trial, Colorado and Mississippi. And that was purely based upon meeting with the AG’s, talking the things that are important to them: competition, rural buildouts, price protection. At the federal level, we’ve made very deep commitments about our spending, and our 5G buildout and jobs. And, in effect, we bring that down to a state level.
I think that collectively gives, for example, the New York attorney general a lot to think about.
If you don’t settle, you go to trial. If (our opponents) “win,” what do you win? What happens to Sprint, what happens to Dish Network (which is purchasing Sprint’s prepaid brands Boost Mobile and Virgin Mobile), what happens to competition, what happens to 5G? So, the dialogue continues.
Q: The full 5G capabilities that you say will come as a result of the merger – 14 times the capacity of standalone’s TMobile – assumes the merger goes through?
Legere: Part of what people are trying to sort out right now is, “hey what’s going to happen to the low end of the market? Is T-Mobile going to be competing down at that low end?” So, we answered that question (with the $15 plan).
Q: Pricing is always a big deal for consumers. But will we also continue to see the extra “goodies” that consumers have become accustomed to in a competitive market? Streaming services and such?
Sievert: It’ll be the kinds of things you’ve seen in the past, but more. That’s what we mean when we use this phrase, “The Un-carrier, super-charged.” And the reason for it is very simple: This network will have massive capacity, and, at the end of the day, capacity is what allows us to do those things.
Legere: Our T-Mobile Tuesdays (weekly discounts) is one of the most incredible things that we’ve done with customers. I sit there some weeks and I say, “so this week, a free Whopper, flowers, tacos at Taco Bell, Shell gas discounts,
“The new company will have more employees than the two separate standalones combined. At the beginning and every day thereafter.” Mike Sievert, T-Mobile COO
LiveNation discounts, Booking.com, and I think to myself that’s just this week.” Some people are so religious about Tuesdays (it’s like) a celebration every week. And the relationship we have with those customers through the app and their engagement is so deep.
Q: What happens to the Sprint brand if the merger goes through?
Sievert: We haven’t made a decision about the brands long-term but what we have made clear is that the mainstream brand in the post-paid arena will be TMobile.
Legere: The Sprint brand is an asset of the new T-Mobile. We’ll probably shortly after the closing of the transaction make some initial brand decisions.
Q: Critics claim that the merger will lead to a loss of jobs?
Sievert: We’ve been very clear that the new company will have more employees than the two separate standalones combined. At the beginning and every day thereafter. And by several years in we’ll have 11,000 more people than the two combined.
Q: Is there a good consumer understanding of what 5G? will bring?
Legere: I think the last 12 months, it’s taken 10 steps backwards because of the marketing that has been done by especially AT&T and Verizon (and their desire to be) “first.” And things like AT&T’s (misleading message around) “5GE.”
Over time 5G is not only fast speeds in the football stadium, it’s about autonomous driving, simultaneous translation and telepresence applications. AT&T and Verizon have been afraid to state here’s how we get there; it doesn’t start with 2020, it’s ’22, ’23.
Saddest moment I have is when an otherwise very smart individual walks up to me and says, “hey, why don’t you guys have this?” And the phone (the person has) says “5GE.”
Q: What do you feel is still misunderstood about this merger?
Legere: Obviously there’s politics involved, it’s a crazy time. But the journey’s been so long.
From day one, I know the answer on jobs, I know the answer on competition, I know the answer on 5G deployment and the rural buildout and on prices, and step-by-step we have provided structural answers.
There’s this archaic question where antitrust lawyers just believe textbookwise that if something is four and it goes to three it is bad. Whether or not supply goes up and prices go down and competition goes up.
Many people worry that there won’t be a T-Mobile doing what a T-Mobile is doing. Whereas what we want to do is make the scale and the scope and the capability to do more of what T-Mobile is doing.