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Tag Archives: John Legere

T-Mobile’s Legere, Sprint’s Claure Defend Merger During House Hearing

By J. Sharpe Smith, Senior Editor

Legere

There were plenty of warnings about the possible negative effects of the proposed merger of T-Mobile and Sprint on rates, rural coverage and jobs during the House Telecom subcommittee hearing, “Protecting Consumers and Competition: An Examination of the T-Mobile/Sprint Merger.” But T-Mobile CEO John Legere, not surprisingly, held his own.

Chris Shelton, president, Communications Workers of America (CWA), said the merger would “kill American jobs, lower wages, and raise prices.”

CWA estimated that the merger will eliminate an estimated 30,000 jobs, 25,500 of which would be in retail stores. The Roosevelt Institute and the Economic Policy Institute predicted a decline in annual earnings between $520 and $3,276 for workers, according to Phillip Berenbroick, senior policy council, Public Knowledge.

Shelton noted that T-Mobile’s 2018 acquisition of iWireless, a regional carrier in Iowa, led to the closure of more than 72 percent of iWireless corporate stores, more than 93 percent of authorized dealer stores and the call centers in Des Moines and Cedar Rapids, Iowa.

Shelton predicted harm would come to employees of the carriers not even involved in the merger. “When you decrease competition for labor, wages go down. That is what will happen throughout the wireless industry at all the wireless carriers if the merger takes place,” he said.

The merger will harm rural carriers by removing a nationwide roaming option, according to Carri Bonnet, general counsel, Rural Wireless Association. She also called Legere’s pledge to freeze prices for three years “cold comfort.”

Legere repeated with relish his mantra that competition will increase, and the number of jobs will rise, saying he would add 600 new retail stores and five new customer experience centers.

“The capacity and scale and the power of the network that this merger will give us will really let me take it to the [AT&T and Verizon] and bring competition in a way that it has not been seen before,” Legere said. “I’m salivating to take it to the cable carriers, as well. This is about creating scale and capacity to super-charge the uncarrier to bring the duopolists kicking and screaming to what they should be doing in 5G.”

The New T-Mobile will need 3,600 additional employees in its first year and more than 11,000 more employees by 2024 than the standalone companies, Legere said.

“This merger will be a tremendous jobs creator at New T-Mobile and across the country,” Legere said. “Our merger will be jobs positive from day one – and going forward. The build-out of our 5G network, investment in new customer care centers, and expansion into new businesses like video distribution, broadband, and enterprise services means thousands more jobs than the two standalone companies would have needed.”

Legere denied claims that synergies from the merger would come from job losses, saying that “a significant amount of the synergy” would come through the decommissioning of 35,000 cell sites. “Together, we will have 110,000 macro nodes. We will pick 75,000 of them, build 10,000 more and the decommissioning of 35,000 cell sites,” he said.

Marcelo Claure, executive chairman, Sprint, said, considering that his company lost $25 billion during the last decade and currently has $40 billion in total debt, the merger is necessary for Sprint to continue to be competitive.

The post-merger T-Mobile will continue to be innovative, because its share of the market will continue to be small compared with AT&T and Verizon.

California Representative Anna Eshoo, who has signed a letter in support of the merger, asserted that the four-carrier market is not currently competitive, because AT&T and Verizon control roughly two thirds of the market and have had the same market share for the last 15 or so years. Creating a strong third carrier could change that, she said.

“This is hardly a dynamic, competitive market. For all intents and purposes, we have a duopoly. Americans pay some of the highest prices for wireless services in the developed world, have the least choice, especially in the rural areas,” she said.

Both companies are missing ingredients to become serious competitors in the market, according to Eshoo.

“T-Mobile has a strong record as competitor. I think we can all agree to that, but it lacks critical mid-band spectrum to compete,” she said. “That is where Sprint comes in. Spectrum is gold and Sprint has it. But Sprint has a $40 billion debt and cannot make the investment needed to compete with AT&T and Verizon.”

Doug Brake, director of broadband and spectrum policy, Information Technology and Innovation Foundation, spoke in favor of the merger, taking issue with those that want to preserve the four-carrier marketplace.

“The four-to-three lens ignores the rapidly differentiating business models in and adjacent to wireless services,” Brake said. “Raw connectivity is increasing commodified and wireless companies are looking to new revenue streams.”

Industry Honors Mobile Infrastructure Hall of Fame Inductees

By J. Sharpe Smith, Senior Editor

Ray

Six weeks ago, few people knew there even was a Mobile Infrastructure Hall of Fame. But as WIA President and CEO Jonathan Adelstein took the stage for the first induction ceremony in a crowded room of 500 of the industry’s leaders, it felt like there has always been one. Or at least there was a pent-up demand for one.

“Today, these five honorees come from companies with a combined market cap of around $200 billion. They employ nearly 100,000 people and growing. And they’re driving the innovation economy with wireless broadband few dreamed possible in the flip phone era,” Adelstein said. “These five leaders are inducted tonight because of their foresight, their vision, and their tenacity. Each faced down challenges — and overcame them all.”

Gathering the top wireless CEOs and others at a ballroom in Washington D.C. on a Wednesday night in mid-November to honor its best had another altruistic goal. It raised $500 thousand for the WIA Foundation in support of training, education and apprenticeships.

Bernstein

“Tonight, the [inductees] lend us their presence because each believes — with us — that another challenge lies ahead for the wireless industry. To build world-class 5G networks — we need a world-class 5G workforce. Together, we’re taking steps to meet that challenge — building a workforce that’s worthy of this great industry,” Adelstein said.

The evening was attended by such notables as FCC Chairman Ajit Pai, Commissioners Michael O’Rielly and Brendan Carr, U.S. Sen. Steve Daines, and other guests from the FCC, Congress and the Administration.

The inaugural class of Hall of Fame inductees included: Neville Ray, CTO, T-Mobile; Steven Bernstein, founder, former CEO and current board member of SBA Communications; Steven Dodge, founder, former CEO, American Tower; John Kelly, former CEO, Crown Castle; and Jose Mas, CEO, MasTec Network Solutions.

Dodge

John Legere, president and CEO of T-Mobile, lent his star power and sense of humor in a heartfelt tribute to Ray, who has 25 years of wireless experience and has led the carrier through the LTE roll out, from the zero POPs in 2012 to 324 million POPs today. The first 200 million POPs were built in six months. He also pushed new technology into the field, including Wi-Fi calling, VoLTE, License Assisted Access and 4X4 MIMO and 256 QAM.

“Neville Ray is truly a genius,” Legere said. “This is a guy that gets things done. You give him the goal and the resources, and you just know that it will be done. You get out of the way.”  He joked that Ray’s budget of $50 billion also played a key role in the success. “Give the guy some cash and he makes it happen.” Ray later clarified that he only got $40 billion.

Jeffrey Stoops, president and CEO, SBA Communications, praised Bernstein’s decision-making ability and leadership qualities.

“He can quickly and incisively distill complex issues down to straightforward decisions has been a critical part of our success,” Stoops said. “More importantly, it’s his entrepreneurial spirit and his values, including honestly, integrity, fair play, quality, customer service and hard work, that Steve instilled in SBA that remains a driver of our continued growth and success.”

Kelly

Jim Taiclet, chairman, president and CEO, American Tower, said Dodge has been a “true trailblazer” for the tower industry, and has served as innovator throughout his 40-year career, which included banking, media and telecom.

“He founded and took public three pioneering companies. The first was American Cable Systems, which he grew into an industry leading position and sold to Continental Cable. Then he went on to American Radio Systems, which was sold to CBS, and then American Tower Corporation. The only flaw in Steve’s plan was an apparent lack of creativity with company names.”

Ben Moreland, former CEO of Crown Castle, introduced Kelly as the “most wonderful person” he has ever known. Kelly served as a mentor to Moreland and “set a high bar as a humble leader and a really nice guy,” Moreland said. Kelly was CEO of Crown from 2001 to 2008 and remained on the board for a number of years afterward.

“He inspires people to be the best they can be,” Moreland said. “He instilled a very customer-centric focus that required us to always think about a win-win situation with the carriers.”

Mas

After Mas became CEO of MasTec, the company grew to 22,000 professionals nationwide, quadrupled its revenues, increased earnings six-fold, and reached a ranking of 428 in the Fortune 500, O’Rielly said in his introduction.

Additionally, Mas diversified MasTec beyond telecom construction into renewable energy, oil & gas and electric transmission, among others.

“Mr. Mas is not just as successful businessman. He is a long-time leader in the Miami-Dade United Way’s Toqueville Society, which donated $15 million to improve lives last year. Most recently Mas and his brother Jorge joined a consortium with David Beckham to raise $25 million to bring a new Major League Soccer team to Miami,” O’Reilly said.

T-Mobile, Sprint Tie the Knot … in Tower Industry’s Stomach

By J. Sharpe Smith, Senior Editor

Those in the wireless infrastructure industry reading the tea leaves after yesterday’s announcement of the T-Mobile/Sprint merger were left with mixed emotions. Macro sites will decrease, while small cells used for 5G will get a shot in the arm. Tower services companies will benefit either way.

The merged company will invest $40B in the network but will also decommission 35,000 macrosites and add 10,000 towers and 50,000 small cells. In sum, 110,000 macro sites will be reduced to 85,000 towers, according to T-Mobile US CEO John Legere. “About $26B of the $43B [in synergy from the merger] is from network: site decommissioning and site avoidance,” Legere said.

While the tower industry will definitely lose sites and money as a result of the merger, Keith Pennachio, EVP at SQUAN, said the deal will make the carriers more competitive, which will be good for the tower industry in the long run.

“The T-Mobile/Sprint merger has me somewhat conflicted,” he said. “I think that from a high level point of view, the industry needs the consolidation and the timing feels right. The amount of spectrum Sprint owns combined with the forward-thinking ‘un-carrier’ attitude of T-Mobile makes the merger formidable for the competition of the combined entity.  Sprint’s debt load is unsustainable in the long run, which could hamper CAPEX spend for 5G deployment on the broadest scale. It’s only a matter of time before cash constraints put Sprint further behind.”

Legere and Sprint CEO Marcelo Claure appeared on CNBC’s “Squawk on the Street” to discuss how the merger would result in an increase in jobs, benefit competition and push the United States toward 5G technology. All talking points for the regulators.

One of the biggest fears when a merger is announced is that infrastructure buildout may be put on hold. Claure said his company will not back off during the regulatory review period. Claure and Legere expect the merger approval process to take 18 months.

“We’re gonna continue to attract AT&T, T-Mobile, and Verizon customers into the Sprint network,” Claure said. “We’re going to invest. This is gonna be the largest investment in Sprint in terms of continuing to build our 5G network. So we’re competitors and we’re gonna continue to run the company the same way the last four years.”

Sprint and T-Mobile US each account for 8 percent of American Tower’s consolidated property revenues. On sites where both companies had separate leases for antenna space, the revenue generated from Sprint and T-Mobile represent 4 percent and 3 percent of American Tower’s consolidated property revenues, respectively. The average lease term on these sites with Sprint and T-Mobile US is three to four years.

Ken Schmidt, Steel in the Air, wrote that Sprint/Nextel sold its towers to SBA Communications, Crown Castle and American Tower, while T-Mobile sold its towers to Crown Castle and American Tower. T-Mobile was the anchor on many of the build-to-suit towers purchased by SBA.

“So, looking at same-company towers ignores nearby cell sites on towers by other tower companies and even worse, those macrocells on non-tower company structures like buildings, water towers, and billboard,” Schmidt wrote. “They indicate that 35,000 sites will be terminated which will almost all likely be Sprint sites and many of which are not on towers where T-Mobile is as well but on other towers nearby.”

MoffettNathanson Analyst Nick Del Deo wrote that the deal would not be good for towers, but he held that a consolidated T-Mobile/Sprint would create room in the wireless market for a new entrant. The obvious possibility would come in the form of a combined Charter/Comcast. Interestingly, in the first quarter of this year, Comcast added more postpaid phone customers than AT&T and Verizon combined.

“If successfully concluded, [the Sprint/T-Mobile deal] would be a negative for the Towers, at least in the medium-term (if consolidation stimulated the entry of a new fourth player, it could be modestly positive over the long-term),” Del Deo wrote.

Now It’s Up to the Feds

The resulting company, which will use the T-Mobile name, Legere will have pro forma revenue this year of $75 billion, and service revenue is $55B to $57B. In 2025, he projected the merged entity would generate $16 – $18 billion dollars of free cash flow. The company would also have 67 percent market share, inviting close scrutiny by the feds.

The deal will soon be examined by the Department of Justice, which will judge whether it reduces competition in the marketplace Legere wasted no time in making his case that the merger will be healthy for the marketplace. He made the case the DoJ must approve the merger to allow the United States compete global in the so-called race to 5G, citing the CTIA study that said China is ahead.

“It’s the early innovation cycle of 5G,” Legere said. “We are behind China. This is not something we can allow. This will be the first company — because of our available spectrum in the 600 MHz and 2.5 GHz bands – to build the nationwide broad coverage 5G service.”

Legere expects that the new T-Mobile’s $40B investment will push AT&T, Verizon and Comcast to pony up an additional $20B.

“That’s a story that Washington wants to hear,” he said. “It’s not about four to three. It’s about zero to one [5G network]. “This deal will get approved because it’s great for the United States.”

Claure said the merger is unique, and ostensibly should be approved by regulators, because it will allow T-Mobile and Sprint to build a 5G network that will be more competitive in the marketplace.

“We’re actually going to offer the best products, best services at lower prices,” he said. “So we plan to make the market more competitive. You’ve seen two disruptive companies, T-Mobile and Sprint. Together, we can turbo charge that.”

Claure said, as a result of the merger, the company would add tens of thousands of jobs in the first three years.

“This is a growth story in which the synergies – the synergies of this deal are more valuable than each company on a stand-alone basis. So I think this is an amazing deal for everybody around,” Claure said.


J. Sharpe Smith
Senior Editor/eDigest
J. Sharpe Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 29 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with  Phillips Publishing, now Access Intelligence.  Sharpe Smith may be contacted at: ssmith@aglmediagroup.com.

Unable to find ‘mutually agreeable’ terms, Legere Says Sprint/T-Mo Merger Talks Finished

By The Editors of AGL

In a short, one paragraph statement, John Legere, president and CEO of T-Mobile US, put to rest years of negotiation and speculation, as he pronounced the proposed T-Mobile/Sprint merger dead.

“The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” Legere said. “Going forward, T-Mobile will continue disrupting this industry and bringing our proven Un-carrier strategy to more customers and new categories – ultimately redefining the mobile Internet as we know it. We’ve been out-growing this industry for the last 15 quarters, delivering outstanding value for shareholders, and driving significant change across wireless. We won’t stop now.”

T-Mobile Increases Capex to Further its LTE Build

By J. Sharpe Smith

October 29, 2014 — In the third quarter 2014, T-Mobile spent $1.1 billion on capital expenditures, up from $0.9 billion in the second quarter of 2014 and up from $1 billion in the third quarter of 2013. Capex for the year is expected to be in the range of $4.3 to $4.6 billion, unchanged from prior guidance. T-Mobile’s increased capex reflects further investment in network modernization, according to company officials.

T-Mobile’s LTE network now covers 250 million POPs and is expected to reach 260 million by yearend 2014, 280 million by mid-2015 and 300 million by yearend 2015, according to Jennifer Fritzsche, senior analyst, Wells Fargo. Ten-by-ten megahertz LTE deployments have occurred in 43 of its top 50 markets.

“The roll out of the 700 MHz A-Block spectrum is progressing well with first sites already on air and handsets in the market, and we’re getting to hit our stride there,” T-Mobile CEO John Legere said during the third quarter earnings call. “We are also converting our 1900 spectrum from 2G to 4G LTE to add coverage, speed and depth to our network.”

T-Mobile continues to introduce wideband LTE in at least 15×15 megahertz configurations to new markets and is currently operational in 19 markets with at least 26 scheduled to be go online by year end.

MetroPCS/T-Mo Combo

T-Mobile has integrated with its merger partner MetroPCS in 55 markets with 78 percent of the MetroPCS customer base migrating onto the T-Mobile network, and 63 percent of the MetroPCS spectrum re-farmed and integrated into the T-Mobile network.

The CDMA portions of the MetroPCS networks have been shut down in Boston, Hartford, Las Vegas and Philadelphia, which is expected to cost between $250 million and $300 million for the year and $97 million in the third quarter. The network shutdowns will facilitate the realization of the network synergies made possible by combination of T-Mobile and MetroPCS.

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J. Sharpe Smith is the editor of AGL Link and Small Cell Link.