Good news for Team Magenta: John Legere will reportedly remain at T-Mobile
Last week we passed along a rumor that was troubling for T-Mobile investors, subscribers and the U.S. mobile industry as a whole. Reportedly, the carrier's CEO, John Legere, was being recruited by former rival turned partner Marcelo Claure to become CEO of WeWork. Claure, the chairman of Sprint, once called the brash T-Mobile executive a con man. Eventually, the two bonded over the proposed T-Mobile merger with Sprint.
Claure is the chairman of WeWork, a real estate company that builds facilities for startups. The company was about to go public but the IPO was scuttled which lead to the resignation of co-founder and CEO Adam Neumann. Sprint parent SoftBank, which already had an investment in WeWork, bailed it out and installed Claure as Chairman. And looking for a new CEO for WeWork, Claure thought of Legere. The latter certainly has done an incredible job turning T-Mobile into the nation's fastest-growing and most innovative wireless provider.
Sources say Legere was never the top choice for the CEO job at WeWork
Those worried about Legere possibly leaving T-Mobile have nothing to worry about according to CNBC. People familiar with the situation, who asked to remain anonymous because the matter is confidential, told the cable business channel that the 61-year old executive has taken himself out of the running for the job. Despite the rumors, the anonymous sources said that T-Mobile's CEO was never the front-runner for the opening at WeWork.
Legere might have also decided against being considered for the job because of the possibility that taking the job would lead to a conflict of interest. That's because the terms of the T-Mobile-Sprint merger can now be restructured after the November 1st expiration of the merger agreement between the two carriers. While the deal has received FCC and DOJ approval, before the transaction closes a lawsuit filed by several state attorneys general needs a disposition. The suit seeks to block the deal and a trial will begin on December 9th.
Marcelo Claure at left, and John Legere at right. Legere will reportedly stay at T-Mobile
Since the merger was announced on April 29th, 2018, T-Mobile has continued to add new postpaid phone subscribers while Sprint continues to lose customers in this key category. The current terms of the deal call for Sprint stockholders to receive .10256 of a T-Mobile share currently valued at $8. With Sprint trading at $5.83, it would seem that most Wall Street investors and arbs expect T-Mobile to rework the terms of the merger. If Legere were to be the CEO of WeWork, owned by Sprint parent SoftBank, he would have had a top executive position on both sides of the transaction which no doubt would have been frowned upon by regulators.
If you're wondering why the fastest-growing major U.S. carrier is so interested in merging with a wireless provider with as many problems as Sprint has, it is all about the hoard of 2.5GHz mid-range spectrum that the latter owns. Mid-band spectrum is hard to come by in the U.S. and T-Mobile wants to employ Sprint's airwaves in combination with its own low-band 600MHz and ultra-high mmWave signals to complete the first nationwide 5G network in the states. Starting on December 6th, T-Mobile says that it will cover over 200 million Americans with its 5G signal partly using the 600MHz spectrum that it paid nearly $8 billion for during an FCC auction in 2017.
So now that it appears that Legere is staying put, you can expect more trolling of Verizon and AT&T, more outlandish comments and the hilarious annual holiday video that is becoming a tradition that smartphone and mobile enthusiasts enjoy viewing every year.