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CNBC reports that Sprint backs off T-Mobile deal; Hesse out as Sprint CEO

Posted: , by Alan F.

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CNBC reports that Sprint backs off T-Mobile deal; Hesse out as Sprint CEO
Something big is happening at Sprint. According to a tweet sent by CNBC's David Faber, the nation's third largest carrier has decided to abandon its pursuit of T-Mobile. Additionally, Faber reports that Dan Hesse will be replaced as CEO of Sprint, tomorrow. The shares of both companies have dropped sharply in response to the news, with T-Mobile down 6% to $31.85, and Sprint's shares off 2.5% to $7.10.

While Sprint never officially made a bid for its rival, it was believed that a deal had already been agreed upon, and would be announced next month. But apparently, SoftBank executives, including Sprint chairman Masayoshi Son, have come to the conclusion that it would be too hard to obtain regulatory approval for the deal. Both the FCC and the FTC have gone on record as opposing a Sprint acquisition of T-Mobile.

The timing of this announcement makes it interesting. Last week, French telecom Iliad bid $15 billion for 56.6% of T-Mobile. At the time, it was considered an inferior bid compared to the one that Sprint was expected to make public. Now that Sprint has backed away from T-Mobile, Iliad might be able to pull off what was seen as an improbable deal. The French telecom is seeking partners in order to raise its bid. Also, watch Dish Network. Chairman Charles Ergen has said that Dish would be interested in T-Mobile, if Sprint were to back off.

Meanwhile, we can only assume that Dan Hesse was considered to be too close to the T-Mobile bid, and might have been lobbying for it even after the decision was made to pull out. Because no official bid was ever made, T-Mobile will not receive a break-up fee like it did when AT&T pulled out of its bid to buy T-Mobile in 2012.

Tweet says Sprint is abandoning its deal for T-Mobile, and will replace Dan Hesse as CEO

Tweet says Sprint is abandoning its deal for T-Mobile, and will replace Dan Hesse as CEO

source: @davidfaber, Barron's

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posted on 05 Aug 2014, 18:56 1

1. Eclectech (Posts: 218; Member since: 01 May 2013)

Whaaaaaaaaaaaaaaaaaat????? *Mrs. Garrett*

posted on 05 Aug 2014, 22:24 1

29. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

I called it the moment Son-boy announced his intent to acquire T-Mo - It wasn't going to happen. Not with AT&T. Not with Sprint.

Time to move on.

posted on 05 Aug 2014, 23:56

31. engineer-1701d (unregistered)

I think someone's gonna get fired if this is not true it's about time they got rid of Haese he's been nothing but a downfall for the last six years

posted on 05 Aug 2014, 18:59 11

2. BobbyDigital (Posts: 1949; Member since: 29 May 2014)

Best thing to happen to Sprint. While I don't advocate for anyone to lose their job but Hesse ran Sprint into the ground. Happy as a T-Mo customer that Sprint is backing off too.

posted on 05 Aug 2014, 20:36 1

14. downphoenix (Posts: 3165; Member since: 19 Jun 2010)

Hesse didnt run into the ground, he did do some good things. However, doing that 20$bln iphone deal instead of spending that money on the network caused a lot of problems for Sprint in the long term that they are going to take a while to recover from. It did stem customer losses, but then again I think they needed to bleed them out a bit so that their network vision upgrades wouldnt have been such a pain to do.

Im glad the deal isnt going through, it would have reduced competition and increased prices and cut jobs.

posted on 05 Aug 2014, 20:58 2

18. BobbyDigital (Posts: 1949; Member since: 29 May 2014)

His bad decisions, Nextel, the iPhone deal, dam near put Sprint into bancruptcy. So yes... He may not have run it into the ground, but he came pretty dam close.

posted on 05 Aug 2014, 21:51 2

23. downphoenix (Posts: 3165; Member since: 19 Jun 2010)

He wasnt involved with Nextel, that was the previous ceo.

posted on 05 Aug 2014, 22:01 2

24. wumberpeb (Posts: 453; Member since: 14 Mar 2011)

Nextel wasn't Dan Hesse

posted on 06 Aug 2014, 11:25

41. lsutigers (Posts: 820; Member since: 08 Mar 2009)

Hindsight is 20/20. While Sprint needed the iPhone to compete with the other carriers, it is now crystal clear they should have spent the money upgrading their network first before putting that much strain on the old infrastructure. An influx of too many smartphones and explosion of data use hurt Sprint's network before proper upgrades were done. It will take time to recover customer perception but they are still a huge company with 52 million customers. They can recover from this if they make the right decisions, its all about execution going forward.

posted on 05 Aug 2014, 22:02 1

25. Dr.Phil (Posts: 1176; Member since: 14 Feb 2011)

He's also done a lot of things wrong that I think many would say ran the company into the ground. For example, if you look at their "Framily Plan" pricing it costs just as much as AT&T for 4 lines. If they wanted to entice customers to join Sprint from AT&T and Verizon, shouldn't they have pricing that falls more in line with T-Mobile than more of the same?

The only thing really going for Sprint is it's prepaid subsidiaries like Boost Mobile which offer a real value in terms of service provided and the devices offered.

posted on 06 Aug 2014, 02:07

35. OldNorseBruin (Posts: 232; Member since: 12 Mar 2013)

I believe that Virgin Mobile & Boost ( which are entirely owned and operated by Sprint) ARE the ONLY profitable assets of Sprint...

posted on 06 Aug 2014, 08:04

39. SellPhones82 (Posts: 569; Member since: 11 Dec 2008)

See, I get a better deal from Framily than I can with anyone else. The name is horrible and the hard part is getting to the 7-10 lines so your at the $25 level for unlimited talk, text, and 1 GB of data. I have the unlimited data and with my company discount pay $40 for unlimited everything, which is the base plan amount for most pre-paid plans. My wife and I went from paying $160 a month to $80. Granted she now has less data, but only used around 1GB anyways.

posted on 05 Aug 2014, 19:05 10

3. KickRocks (Posts: 166; Member since: 22 Mar 2011)

Holy Christ........Thank the lord almighty, hahaha, seriously though, thank god. I'm sure the people of T-Mobile including myself want NO PART OF SPRINT!!!!

posted on 05 Aug 2014, 19:06 9

4. retronig (Posts: 23; Member since: 21 Nov 2013)

Thank god!!! Hesse was a horrible CEO and made bad decisions. He was very overpaid and was a huge waste of money. The jerk is still making out like a bandit though I would assume. I am so glad that tmo wont be part of sprint. I am a tmo customer and the thought of being with sprint was not a happy one. I worked for sprint for 4 years during the Hesse regime and it was very depressing. I spoke with more unhappy customers than happy ones.

posted on 05 Aug 2014, 19:46 1

9. palmguy (Posts: 537; Member since: 22 Mar 2011)

Agree. Worked Sprint thru all the bull (03-12). Crazy times.

posted on 06 Aug 2014, 13:55

43. JEverettnow (Posts: 228; Member since: 11 Mar 2013)

You left before it got crazy. Its on another level these days. i hope this is a change for the better. We have been on shakey ground since Son took over.

posted on 06 Aug 2014, 18:09

46. rdaex (Posts: 148; Member since: 24 Oct 2012)

Agreed... I left in July of 2013. It was like working for a schizophrenic with ADD. One week to the next, no idea what the push would be, what product we were told to push, the promo included in that push (buy a SPC get a 100 discount, uh.. just kidding... uh, no, were going back to that now. Buy a tablet get 100 off a phone, but not combinable with the SPC offer)

Work at Tmobile now and its night and day. I sell stuff. I am allowed to be a sales manager, and its awesome. (And making 40% more doesnt hurt.)

posted on 05 Aug 2014, 19:11 3

5. mturby (unregistered)

Yesss!!! we won! consumer 1. dark corps 0

Get the heck out of here Hesse! and dont use the main door.

posted on 05 Aug 2014, 19:16 1

6. mrmagicman21 (Posts: 8; Member since: 21 Jan 2014)

Sucks for both companies. Now there will not be true competition for att and vz.

posted on 05 Aug 2014, 21:34 2

22. Doakie (Posts: 2009; Member since: 06 May 2009)

I don't know what people are talking about with these claims that T-Mobile and Sprint are incapable of competing with the two larger companies. They're all offering prices around the same monthly fees, and they're all offering the main handsets that are released. The only way I could see this whole argument is with rural coverage and I still don't get that because a combined company wouldn't magically have spectrum in rural areas either one didn't have it previously. Plus with Sprint buying T-Mobile the combined company would have even more debt due to one borrowing money to purchase the other.

posted on 06 Aug 2014, 00:05

33. engineer-1701d (unregistered)

I'm not sure if you know this but Sprint is and has the best spectrum of all of the markets now it will take them 3 to 5 years from now to do everything correct another passes out the way but as the Japanese are they will expedite everything and put that money that they were going to use to good use and I myself have truly hated Sprint for the last five years with their terrible network

posted on 06 Aug 2014, 16:40

44. William13 (Posts: 27; Member since: 10 Mar 2011)

I assume that since your handle says engineer, then you should know a thing or two about how things work. However, Sprint has some of the WORST spectrum available. Their holdings are mostly in the 1800MHz band and the 2.5GHz band. Sure, quantitatively they have more spectrum than anyone else, but with spectrum, quality trumps quantity. They do have some 8 licenses in the 800MHz spectrum (VZW's baby), but not enough for a nationwide infrastructure. That 2.5GHz spectrum can't even penetrate glass with UV coating, so it really has little benefit in real-world cell phone usage. With the upcoming spectrum auctions they might be Able to gain some ground on the lower frequency spectrum, but AT&T and VZW will have something to say about that. (T-Mo has no holdings in those frequencies and I don't see a reason for them to try building a new backbone from scratch)

posted on 05 Aug 2014, 19:17 1

7. painnpanic (Posts: 10; Member since: 18 Dec 2013)

He made 49 million last year for a company that nearly filled bankrupt from his poor decisions. T-mobile deal would have helped but would have never passed. Smart move Softbank. Now they can get someone who can make a difference.

posted on 05 Aug 2014, 19:23

8. meanestgenius (Posts: 11796; Member since: 28 May 2014)

I'm happy as a T-Mobile customer that Spring will not be getting their hands on them, but saddened to hear that Dan H. will be losing his job.

posted on 06 Aug 2014, 07:34

37. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

You didn't expect Son-boy to take a hit for pissing away a $1B breakup fee, did you? Next guy down the foodchain is Hesse. It was inevitable.

posted on 06 Aug 2014, 11:32

42. lsutigers (Posts: 820; Member since: 08 Mar 2009)

Did you read the article? They didn't have to pay the breakup fee as the deal was never formally announced. BTW, the breakup fee was $2b.

posted on 05 Aug 2014, 19:49 6

10. palmguy (Posts: 537; Member since: 22 Mar 2011)

Sorry for Dan? He made more than Vz, T-Mo, and ATT CEO's. And now he gets a golden parachute. I need me a CEO job. :)

posted on 05 Aug 2014, 19:58 2

11. HASHTAG (unregistered)

GREAT NEWS! Never been a T-Mobile customer, but I've been a Sprint customer and... well, don't really need to explain.

posted on 05 Aug 2014, 20:13 3

12. ajac09 (Posts: 1481; Member since: 30 Sep 2009)

NO MORE DAN HESSE Now sprint will survive!

posted on 05 Aug 2014, 20:26 4

13. joe1blue (Posts: 169; Member since: 25 Jul 2013)

as for me I was a former Sprint customerfor about 7 years and now I am at T Mobile customer I could not be happier that this merger rumor is endingI can't express how much I hate sprint that's all I can say.

posted on 05 Aug 2014, 20:48 3

15. Joshua9007 (Posts: 90; Member since: 08 Jun 2012)

Hesse was not the reason for their demise, in fact he did much to put them back on the right path... But he did get over-paid for a company on the rocks, although high executive pay is typical of companies that are not doing as well b/c they have more risk, so companies must pay well to get a good CEO.
The real problem is that he is the face of the old sprint, and it will look like they are doing more with a more with a new gave to sell it. If it was because he wanted the merger idk, but I do know sprint could use some excitement... and a better marketing plan/ service plans!

T-mobile CEO said it best, sprint is just a pile of spectrum & a promise they will eventually do something with it... I think the merger would have made a urban juggernaut, But I think sprint can take the speed crown and eventually start gaining customers back.

posted on 05 Aug 2014, 21:03 2

19. Totse2k15 (Posts: 458; Member since: 11 Feb 2014)

Great news!! Best wishes for T-mobile and Legere.

posted on 05 Aug 2014, 21:21 3

20. CraalLegacy (unregistered)

Good! I just moved from Sprint to Tmo and was so worried Sprint wld acquire then ruin Tmo.

posted on 05 Aug 2014, 21:23

21. seanmorem (Posts: 1; Member since: 05 Aug 2014)

T-Mobile Is The Absolute Worst Company I Have Ever Dealt With! This Week,I Had To File Two Seperate Complaints With The Better Business Bureau Against T-Mobile.The First Complaint Is Because Of False Advertising.T-Mobile Refuses To Pay Four Of Us,Three Of My Friends And Myself For The "Refer A Friend" Program.Each Of Us Has Spent The Last Four Weeks At The "Refer A Friend"Website And T-Mobile Repeatedly Claims Our Information Doesn't Exist.We All Have Contacted T-Mobile Weekly And Just Get The Run-A-Round.My Second Complaint Is Because T-Mobile Double Charged My Bank Account For The Monthly Service And Refused To Reverse One Of The Charges.I Spoke With 6 Reps Including The Billing Manager,And The Billing Manager And Two Other Reps Called Me A Liar.Even Though I Have A"Screen Shot"Of My Bank Account Showing One Charge After The Other.Then The Billing Manager Told Me That T-Mobile Does NOT Reverse Charges Ever! I Had To Contact My Bank And Get The Second Charge Removed Before My Other Bills Cleared! Beware Of T-Mobile! They Are Criminals!

posted on 05 Aug 2014, 22:04 5

26. g2a5b0e (Posts: 3724; Member since: 08 Jun 2012)

^^^ 1st post ever, huh? Can you say "paid troll"?

posted on 06 Aug 2014, 16:45

45. William13 (Posts: 27; Member since: 10 Mar 2011)

? How does one get paid for this? I wouldn't mind a little spare income for sitting on the computer and making angry claims about whatever.... That's easy money!

posted on 06 Aug 2014, 20:05

47. g2a5b0e (Posts: 3724; Member since: 08 Jun 2012)

You should ask him.

posted on 06 Aug 2014, 00:05 3

32. 0xFFFF (Posts: 3806; Member since: 16 Apr 2014)

"T-Mobile Is The Absolute Worst Company I Have Ever Dealt With! ..."

Dear Respected One,


Permit me to inform you of my desire of going into business relationship with you. I got your contact from the International web site directory. I prayed over it and selected your name among other names due to it's esteeming nature and the recommendations given to me as a reputable and trust worthy person I can do business with and by the recommendations I must not hesitate to confide in you for this simple and sincere business.

I am Wumi Abdul; the only Daughter of late Mr and Mrs George Abdul. My father was a very wealthy cocoa merchant in Abidjan,the economic capital of Ivory Coast before he was poisoned to death by his business associates on one of their outing to discus on a business deal. When my mother died on the 21st October 1984, my father took me and my younger brother HASSAN special because we are motherless. Before the death of my father on 30th June 2002 in a private hospital here in Abidjan. He secretly called me on his bedside and told me that he has a sum of $12.500.000 (Twelve Million, five hundred thousand dollars) left in a suspense account in a local Bank here in Abidjan, that he used my name as his first Daughter for the next of kin in deposit of the fund.

He also explained to me that it was because of this wealth and some huge amount of money his business associates supposed to balance his from the deal they had that he was poisoned by his business associates, that I should seek for a God fearing foreign partner in a country of my choice where I will transfer this money and use it for investment purpose, (such as real estate management). Sir, we are honourably seeking your assistance in the following ways.

1) To provide a Bank account where this money would be transferred to.

2) To serve as the guardian of this since I am a girl of 26 years.

Moreover Sir, we are willing to offer you 15% of the sum as compensation for effort input after the successful transfer of this fund to your designate account overseas. I will also fix all your T-Mobile issues for you, to demonstrate my gratitude.

Please feel free to contact ,me via this email address

Anticipating to hear from you soon.
Thanks and God Bless.
Best regards.
Miss Wumi Abdul


posted on 05 Aug 2014, 22:10 3

27. naittosan (Posts: 234; Member since: 28 Jun 2014)

Everyone that had any common sense seen this coming

posted on 05 Aug 2014, 22:16 1

28. NateAdam8 (Posts: 388; Member since: 17 Feb 2012)

How long is he going to play this game?

posted on 05 Aug 2014, 23:33 3

30. medicci37 (Posts: 1279; Member since: 19 Nov 2011)

As a tmobile customer I'm delighted by the news. Sprint would have ruined tmo

posted on 06 Aug 2014, 01:59

34. OldNorseBruin (Posts: 232; Member since: 12 Mar 2013)

At least SPRINT was smart enough to pull out of the deal before officially committing; they saved themselves 3 or 4 BILLION dollars having to pay T-MOBILE for the "break up" fee { unlike GREEDY-Ass AT&T which had to cough up the cash to T-Mobile ( which in turn used that money to improve its network!) }

posted on 06 Aug 2014, 03:20

36. hellobib (Posts: 17; Member since: 20 Nov 2013)

Done deal, Sprint just bought t mobile. I think ledger will replace sprints CEO n this would be so messed up cuz if the price goes up on Tmobile's plan I'll b out like a butterfly B

posted on 06 Aug 2014, 07:44

38. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

Are you ESL? If not, do you have reading comprehension issues? Or, perhaps you are suffering from mini-strokes?

posted on 06 Aug 2014, 08:39

40. youlookfoolish (Posts: 173; Member since: 14 Dec 2012)

Not everything wrong with Sprint was Dan's fault.

But man, things just weren't getting better. I understand the purpose of trying to buy T-Mobile when they are not a healthy company. The reality is though that money should've been invested in more competitive rate plan and accelerated metro network build out.

Dan shouldn't have been pulling the money he was and SoftBank reaching a breaking point should be a glimmer of hope that maybe Sprint and its leadership isn't totally tone deaf. No one has any idea how this will shake out but it was a change had to be made backdrop.

No one should feel sorry for Hesse. He has more money than he can count. He may never have to work again. This isn't like a call center or retail employee needing the job for ends to meet. He was ineffective and got his card pulled for being too pricey for his lack of results. That is how all jobs should treat employees.

The new CEO better get the hamster out of the commercials, drop the price plans in line with competition, and invest the 41 billion in the network. Three simple suggestions to right the ship.

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