Sprint CEO, Dan Hesse speaks on T-Mo merger and John Legere “egging” him on

Screen Shot 2014-05-07 at 15.13.25

Yesterday, Sprint’s CEO Dan Hesse made an appearance on Bloomberg’s Market Matters where he discussed a handful of topics, including the rumored merger of Sprint and T-Mobile as well as his competitive relationship with Magenta’s CEO, John Legere.

Of course, all of us want to hear from the horse’s mouth whether or not there’s any truth in the merger rumors. But as you’d expect, Hesse wasn’t keen to outright state “yes, it’s happening”. Instead, he mulled over the potential positives of a merger. Chief among those was that – in his mind – a stronger #3 network is better for the consumer than having a duopoly of Verizon vs. AT&T, plus two weaker competitors.

He stated:

“Right now, I mean, the issue that you have is in the U.S. wireless industry is it really is a duopoly where you have 84% of the EBITDA and basically 100% of the free cash flow out of two companies. Two large companies. So I think the industry would be healthier. You’d have healthier competition with a stronger number 3, and I think, I can’t comment specifically on any speculation,” Before going on to say, “I think a stronger number 3 would be better for consumers.” 

But of course, the regulators are still proving a stumbling block. An issue Hesse is clearly aware of, stating that if a transaction was to go through, that would have to convince the regulators to believe what they and some consumers might already believe, in regards to a healthier market place.

Questions arose on how carriers can remain competitive, and still keep a sustainable and healthy business going. Something T-Mobile will be dealing with as well as Sprint. Being the two smallest of the larger networks, they have to invest more money per customer to achieve national coverage than either Verizon or AT&T, and neither carrier made a profit last quarter. A to remain competitive, you have to cut prices, like Sprint did with its $40 prepaid plan yesterday.

Of course, with competition making its way into the discussion, so did John Legere’s name. “Is he a peer or.. worst nightmare?” the hosts quizzed. He had mostly positive things to say about Magenta’s CEO, stating “He’s doing quite a fine job there.” Which I guess sounds a little patronizing, but ultimately complimentary. A recent Twitter jibe from Legere towards Sprint prompted Hesse to comment “I don’t think John’s ever going to stop egging me on.”

If that says one thing, it’s that at least one carrier CEO knows how to receive John Legere’s public pokes as light-hearted competition. Unlike some, who decide to throw him out of parties and get all upset.

You can view the whole interview below, but, to get back around to it, without confirming or denying it, it’s pretty clear that Sprint would like to merge with T-Mobile if the regulators would just allow it.

Tags: , , , , , , , ,

  • SprintSucks

    I hate Sprint with a passion. Which is a little sad. But it’s true.

    • Matt

      Sprint is pretty bad, I do agree.

  • Eric Hare

    “I think a stronger number 3 would be better for consumers.” Translation: “We’re bleeding customers while T-Mobile revolutionizes the industry. Quick! Absorb them!”

  • S. Ali

    If Sprint is serious about “scale” they can avoid the FCC all together. T-Mobile and Sprint could enter into a joint venture to create a new company (50% ownership each) where they combine spectrum and customers. Convert T-Mobile and Sprint into spectrum holding companies that lease spectrum to the newly created carrier. Move T-Mobile equipment from overlapping regions into new markets and add new Sprint equipment on top of it. They could create a nationwide hexaband network without ever merging. This is exactly how Verizon Wireless (Verizon + Vodaphone) and ATT/Cingular (SBC South + Bell South) grew to their size.

    • fsured

      Interesting take and I was unaware that Verizon and At&t did this. When you mention put Sprint equipment on top, are you implying that both network technologies remain and phones be made to work them? If they move T-Mobile equipment from overlapping areas would that leave only Sprints network in these areas?

      • S. Ali

        Sprint and T-Mobile only share 1900mhz. T-Mobile has 700 and 1700/2100. Sprint has 800 and 2.5ghz. So its only at the 1900mhz where they overlap. Sprint is already planning multi-band devices starting in 2015. If they push up plans for VoLTE, and got rid of 1×800 CDMA voice, they could have a massive hexaband network on LTE. Its a long-term transition, but it is the future of the 2 companies anyway.

    • archerian

      how will they avoid the FCC altogether if they lease spectrum to another
      entity? any spectrum sale or lease will need review by the FCC
      especially when done at such a large scale.

      • S. Ali

        Because spectrum sharing is no different from roaming agreements and doesn’t fall under the same considerations as mergers and acquisitions. DOJ isn’t involved at all (the major roadblock to a merger). Completely different criteria. Its the very reason Sprint is purusing the CCA Data Hub arrangement. FCC doesn’t care about spectrum sharing because it doesn’t concentrate spectrum ownership under a single owner.

        • archerian

          wrong, where do you get your information from? Spectrum changes of such a large scale need an application to the FCC, review/comments for a certain period and then a ruling/approval from them. Btw, even some roaming agreements need FCC review and they have jurisdiction over it.

  • Aurizen

    Anyone wants to know what Phillipp Humm is up to? lol I bet he mad T-mobile is doing well after he left

    • archerian

      He’s doing much better – he’s the CEO of Vodafone Central and Northern Europe

      • Trevnerdio

        Who put him in charge of Vodafone?? He totally screwed T-Mo. (Yes, under orders, I know, I know, but still…He wasn’t a very good CEO.)

      • superg05

        isn’t Vodafone tanking in Europe? i could be wrong

  • Justin Merithew

    If done right, a merger could be very beneficial to the consumer, but given Sprint’s handling of mergers in the last we have every right to be wary. If they put Legere in charge and pushed to being purely LTE instead of worrying about CDMA or GSM it could be very interesting.

    • Alexander

      Do you honestly think that if they merged they would try to switch customers to legacy CDMA and/or GSM networks? That makes no sense considering each has about half their network on LTE already. Why not just keep going with that rollout?

      • Justin Merithew

        Did you not read what I said? I said they should focus on LTE NOT CDMA/GSM

    • Matt

      Sprint is a tarnished brand. If I had to hazard a guess, T-Mobile will be the parent if a merger were to take place.

      • Justin Merithew

        That would probably be the best bet, but who knows how Son would handle it. It was odd to purchase Sprint, a tarnished brand, in the first place.

  • http://rosarynovice.stblogs.com/ Augustine

    It betrays logic that a triopoly is better than a duopoly and a quartetoly. Why isn’t there much competition between AT&T and Verizon? Each certainly has the wherewithal to challenge the other, but they choose not to because their status is akin to a cartel. Having another carrier join this virtual cartel is the last thing that would benefit consumers. Rather, we don’t need fewer carriers, but more. May Dish and others come to challenge the current quartetoly.

    • DirkDigg1er

      What makes you think S-Mobile will be invited to the cartel? If VZ/T profits start taking a hit, they will get more aggressive.

  • Fred.d

    I guess everyone’s forgetting ?! Sprint is under NEW MANAGEMENT ?! Lmfao freak what they did in the last they have a great owner in Mr.Son who hasn’t failed ! God I wish this merger would just happen already

    • Jay Holm

      Son hasn’t done anything imoactful since he invested $20bln in Sprint, nothing impactful at all.

      • archerian

        There have been several employee changes and firings in the engineering and network side.

    • http://profiles.google.com/gallimichael Michael G. Galli

      Yes. Because metered data, expensive SMHS options and HAMSTERS will make T-Mobile US better. /s
      Get a life.

  • Paul

    NNnnnoooooOOOOOOOpe.

  • Alex Zapata

    That’s a big fat nope.

  • francob911 .

    Guys if this happens they would convert it to all CDMA No more unlocked phones so I can just pop in a Sim card… When going out of country …. Just like verizon

    • Nurdface Gamerhandz

      No they wouldn’t. It’d be a merger just like Metro PCS. They’d start trading under T-Mobile’s name with Sprint’s assets. Softbank isn’t stupid, they know Sprint’s name is mud.

      • DirkDigg1er

        I think it was more of an combination of poor management and lack of drive.

        2 areas where T-mobile excel at.

      • KlausWillSeeYouNow

        Sprint’s name, in my opinion, is gold. (No pun intended.) Like, it’s a great name and logo. The problem is the product: their network is very poorly received, and rightly so. The perception is what kills the Sprint name.

    • DirkDigg1er

      All paths lead to LTE. By 2015, LTE Release 12 will combine all spectrums through carrier aggregation. That is the path of all carriers. Both CDMA and GSM will be phased out.

      • http://rosarynovice.stblogs.com/ Augustine

        Given that AMPS took a decade after 2G had been around to be phased out, I wouldn’t hold my breath about the demise of 2G. As a matter of fact, given that more feature phones are still sold in the US than iPhone, it’s easier that the lights be shut off in 3G before 2G.

        • http://pharaohtechblog.blogspot.com/ Conan Kudo (ニール・ゴンパ)

          Given that most feature phones are 3G phones (just no one says much about it), lights off on 2G before 3G is definitely possible (and is happening).

        • http://rosarynovice.stblogs.com/ Augustine

          This is not true. Of the best selling phones worldwide (v. http://zd.net/1m6dOnO ), about half are feature phones and none of them supports 3G. Evidently, it wouldn’t make economic sense to add an extra radio to support 3G on a feature phone as the same radio used for voice can be used for 2G data. With new smartphones increasingly supporting 4G, even low-cost ones, consumers upgrading their feature phone are likely to go straight to 4G, bypassing 3G.

          Moreover, due to the populistic nature of regulators, they’ll be as unwilling to turn out the lights in 2G as they were in AMPS, lest those whiny AARP members be upset. It’s much easier to let carriers repurpose most of their 3G licenses to 4G.

    • Jarobusa

      Why would u say this? Any facts? Nope because its total BS what you said.

      • francob911 .

        Its my opinion any comment on this site could be BS including yours … Verizon phones are carrier locked just like Sprint, you don’t have the freedom of giving it away to a friend or family in other countries like an unlocked AT&T or T-Mobile phone .I think if the merger happens Sprint is going to eventually lock their phones because it means more money …. Part of the reason Verizon is number 1 is because there phones are locked to their network.

        • Jarobusa

          Sprint with in a year will sell all phones unlockable. Google it if you don’t believe me. From CNET: “Sprint aims to make all its devices unlockable by February”. Verizon is #1 because of their #1 network not because they lock phones.

        • francob911 .

          Read carefully I said part of the reason .. Google it

  • francob911 .

    His trying to brain wash you

  • DirkDigg1er

    After watching the Bloomberg interview yesterday, I am suprised Dan Hesse said it wouldn’t bother him if he doesn’t lead the combined company. “I’m 60
    years old,” he said. “I still have a lot of things I want to do in
    life.”

    It looks like John Legere is truly the top candidate for the next CEO.

    • superg05

      he has stock in the company he gets paid well either way

      • DirkDigg1er

        I agree somewhat. Getting money is one thing, but bring a company back from the dead is a legacy. I think Sprint needs a stronger leader, one who can address network issues with transparency. JL is perfect for the job. He is in a great position to turnaround another brand.

        • archerian

          I’m not sure how effective JL would be when he has Son towering over him. He was effective at T-mobile since he was given a free rein there, heading Sprint might not be something he might equally relish.

        • superg05

          I’m sure the severance package negotiated during the takeover will more than make up for it

  • Fr0stTr0n

    After going out of town last week end, I may have to go back to AT&T, the T-Mobile coverage in Washington state is horrid outside of major cities like Seattle and Tacoma, especially for what im paying. Extended network almost everywhere or piss slow 4G in smaller towns.

    Starting to hate the Magenta….

    • nosig

      Then don’t try Sprint there either, much worse.

    • KlausWillSeeYouNow

      Starting to think you don’t actually have T-Mo. T-Mo does not refer to roaming coverage as “Extended” on any device. Sprint and Verizon do, though.

      I think you’re on the wrong site.

      • Fr0stTr0n

        Well what the fvck is the E supposed to mean then?

        • thepanttherlady

          Extraordinary

        • KlausWillSeeYouNow

          EDGE. Lmao

        • thepanttherlady

          If you want to rewrite the sticky note on your pic I can approve it. ;)

        • Fr0stTr0n

          He’s not worth the effort

        • KlausWillSeeYouNow

          I wasn’t laughing at you. But thanks for the lovely note.

          I was laughing at the misunderstanding, is all.

        • KlausWillSeeYouNow

          How did you take the photo? With another device, or a camera?

        • Fr0stTr0n

          Another camera

        • KlausWillSeeYouNow

          …camera on Sprint? ;-)

        • Fr0stTr0n

          Fark you

        • KlausWillSeeYouNow

          Calm down. Don’t waste another Post-it – you really have a poor sense of humor if you thought I was serious. Learn to take a joke.

        • Fr0stTr0n

          People making judgement calls on what I do and do not own is no humor attempt in my book

        • KlausWillSeeYouNow

          I never judged anything. I suspected you were on Sprint or something, but you proved me wrong. Congratulations.

          It’s not typical for people to refer to an “Extended” network on T-Mobile. My suspicion of your claims was merited.

        • KlausWillSeeYouNow

          I don’t have Sticky Notes… and all I have right now is my crummy unlocked ZTE Avail 2 and a webcam, but it’s a slow day at work and I thought I’d give it a go anyway. :-)

          http://i.imgur.com/kmbW7Dj.png (sorry for the white lines… weird.)

          And yes, I also have T-Mo.

          http://i.imgur.com/VdlRwx3.png

          All in good fun. No offense intended.

        • TMOTECH

          Edge

  • Doble-A

    Thanks, but no thanks Sprint.

  • bede2live

    Sprint has recently upgraded my service and the voice quality is noticeably better (data also faster). I am all for better competition and for Sprint buying and running T-Mobile.

    • Evan Lam

      Still not sure where i stand on the merger just yet, but i definitely don’t want Sprint running T-Mobile.

  • vinnyjr

    No Way, Sprint is CDMA, patheticly slow and so old. T-Mobile is GSM, HSPA+, That is where I want to be. I left Verizon and Sprint years ago because of that lousy technology. T-Mobile is installing the newest LTE hardware, 4×2 MIMO, Multiple input – Multiple output. This is twice as fast as any other Carrier out there. This time next year T-Mobile will have implemented that hardware everywhere across the US, Sick speeds for everyone. My speeds are crazy, over 15mb download on HSPA+ and my LTE is over 35mb download. I am sticking with the best Carrier in the US, thank you T-Mobile.

    • KlausWillSeeYouNow

      Same! I’ve tried them all, and T-Mo is where I’ll stay. I miss NO CDMA-based carrier at all.

  • Winski

    Screw Hasse and his EBITA numbers thar he memorized with the bean counters yesterday…. One of the biggest reason that Sprint is such a weak sister is because they got no personality !!! NONE!! AND, that comes straight from Hasse…

    IF T-Mumble does merge with Sprint, IF Legere doesn’t run it, i’m gone…. Already been a Sprint customer.. THEY SUCKED !!!!

  • http://twitter.com/tabascotx Mike Roberson

    So here’s DT’s coming excuse for the merger.. http://www.nytimes.com/2014/05/09/business/international/deutsche-telekom-profit-falls-amid-aggressive-spending-in-united-states.html?rref=technology&_r=0

    Look at the last line though, that’s why profits are down. They spent $1.1B buying out the remaining parts of their Czech unit. Its not T-Mobile USA that caused profits to be down.

    • TMOTECH

      DT profits have nothing to do with T-Mobile US. They are just a majority share holder. T-Mobile lost cash because of the ETF and trade in programs. It will come back to them on the back end.

  • francob911 .

    In my opinion any comment on this site could be BS including yours … Verizon phones are carrier locked just like Sprint, you don’t have the freedom of giving it away to a friend or family in other countries like an unlocked AT&T or T-Mobile phone .I think if the merger happens Sprint is going to eventually lock their phones because it means more money …. Part of the reason Verizon is number 1 is because there phones are locked to their network.

    • nuff_said@yahoo.com

      wrong iphone 5, 5c & 5s along with galaxy s3 s4 s5 & note 2 & 3 are not carrier locked they r unlocked.

      • francob911 .

        Your wrong I had a note 2 for Sprint and the Sim card was inbedded nice try tho

        • storeowner

          verizon …. he’s talking about verizon …

        • dontsh00tmesanta

          vz has unlocked sims yes but they are unlocked for outside the US. Unless thats changed

  • guidomus_maximus

    Sprint = Dumb as h*ll

  • Noel

    NOT GONNA HAPPEN….SAVE UR MONEY AND DON’T WASTE UR TIME. COMPETITION IS WORKING JUST FINE CUZ TMOBILE IS FORCING THE OTHER CARRIERS SPRINT, AT&T AND VERIZON TO SOMEHOW ADAPT TO THEIR MOVES, WHICH IN TURN BENEFITS THE CONSUMER. I see millions more UNLEASHING themselves from the other carriers and become free on Tmobile. Go TMOBILE

  • mingkee

    Sprint is the biggest f’up in the communication industry!
    Whomever merge with Sprint will surely suffer painful death!
    Look at Nextel and Clearwire. You all are warned.

  • 0neTw0

    Sprint is one F’ed up “Framily”. Maury Maury Maury….

  • jdrtech

    if sprints buys tmobile, after being a loyal customer to tmobile for 12 years…im leaving for sure!!