Sprint's Hesse: Sprint, T-Mobile merger is possible in the long run

Sprint's Hesse: Sprint, T-Mobile merger is possible in the long run
The Softbank deal to buy 70% of Sprint hasn't closed yet and already the two executives involved are talking about making more deals. Sprint's stockholders need to sign off on the deal as do U.S. regulators, something that other carriers would like to block. Sprint CEO Dan Hesse seen no problem considering the shareholders are getting a premium for the stock and regulators want stronger competitors in the industry. And if there is one thing that Sprint is getting, it's strong. Softbank CEO Masayoshi Son said he would make weekly calls and make monthly trips to America to make sure his $20.1 billion investment is working out. Son promises to use the same techniques that helped Softbank challenge Japan's top carriers after the company acquired the Japanese arm of Vodafone in 2006.

Softbank's Son (L) and Sprint's Hesse are still hungry to deal

Softbank's Son (L) and Sprint's Hesse are still hungry to deal

As we said, both Son and Hesse are already talking about doing more deals. "We shouldn't rule out any opportunity or alternative," Son said, adding, "I will be aggressive—that's all." Meanwhile, Hesse is not ruling out the possibility of Sprint making a play for T-Mobile down the road. By then, T-Mobile will also include MetroPCS which is merging with T-Mobile in a reverse merger. The Sprint CEO shrugs off any chance of regulators trying to stop a deal between the nation's third largest (Sprint) and fourth largest carrier saying that such a deal would be great for consumers and provide a challenge to Verizon Wireless. Verizon, the nation's largest mobile operator, just added 1.5 million new net contract customers in the third quarter, its largest such gain in the last four years.

Thanks to the deal with Softbank and it's purchase of Clearwire, Sprint has gone from having to holdout its hat for more spectrum or money, to having few worries about finishing the build of its LTE network. And while Dan Hesse was recently still hearing it from angry shareholders about his $15.5 billion gamble on the Apple iPhone, he is now the one CEO that has the opportunity to really change the face of the U.S. mobile carrier industry. Softbank's Son is willing to give him anything he needs to put Sprint in the same conversation as Verizon and AT&T. The question is, will Dan Hesse be able to deliver?

source: WSJ

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20 Comments

1. PAPINYC

Posts: 2315; Member since: Jul 30, 2011

Yaaaaaay, Galaxy Note 2 is here. FINALLY!!!

18. Nadr1212

Posts: 741; Member since: Sep 22, 2012

wow, this is like the pangea millions of yrs ago, except this is with carriers and we're in 2012, not -1000000000000 :P

2. Ravail

Posts: 182; Member since: Oct 14, 2011

If Sprint and T-Mobile do happen to merg, which i doubt they will, AT&T will certainly be upset...

11. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Sprint's challenge now is to go balls-to-the-wall with its LTE roll-out. If it remains a low-cost high-quality alternative to AT&T and VZW, it could find itself in a very compelling position in a few years. Sprintt acquiring T-Metro/PCS is going to run into the same resistance that AT&T ran into the first time around.

12. lubba

Posts: 1313; Member since: Jan 17, 2011

its funny that two struggling companies want to combine but meet with regulator resistance. But they'll let Verizon and ATT continue to grow. What's gonna happen to tmo if it's really underwater? What, Obama bail them out? Sell tmo in pieces? What happens to customers? Dammit, what do I know.

15. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

AT&T-Mo was not about two struggling companies. AT&T is anything but a struggling company. T-Mo + MetroPCS could fit the definition of two smaller/struggling companies, but I haven't read where there is regulatory disapproval of their proposed merger. Sprint buying a combined T-MetroPCS would face almost as much scrutiny as AT&T's attempt to acquire T-Mo. AT&T would be the one raising the most fuss against the merger. Personally, consumers are better served with more rather than less competition. Two large plus two comparatively large players are better for consumers than three large ones.

19. Nadr1212

Posts: 741; Member since: Sep 22, 2012

i dint notice at&t wasnt a struggling company, EVEN THOUGH they ARE Americas largest carrier (sarcasticley)

20. andynaija

Posts: 1252; Member since: Sep 08, 2012

Verizon is Americas largest carrier...

3. Mark.J.Linskiy unregistered

As long as it benefits the users/consumers (such as myself since I'm using Sprints network), I'm all for it. Sure it'll all take time, but so does everything else. Hopefully this all works out for the companies and consumers.

4. -box-

Posts: 3991; Member since: Jan 04, 2012

I sure hope not. Look what Sprint did to Nextel! Those even used somewhat compatible tech!

6. wumberpeb

Posts: 453; Member since: Mar 14, 2011

There's nothing compatible between Nextel and Sprint. What's somewhat compatible? I suppose TDMA and CDMA certainly look similar...

17. letgomyeggroll

Posts: 139; Member since: Jun 13, 2012

Nextel is not TDMA or CDMA, its iDEN. And no its not the same technology, its totally different. iDEN is almost like GSM, they also use SIM cards. But Sprint mainly got it for the direct connect customers, and merge them to their existing systems. and acquire the higher 800 MHz for the bandwidth. It was really a bad merge on Sprint part. Nextel were in the hole with the rebanding deal that costed them billions of dollars. More than they estimated, and besides that with high cost for services and losing subscribers more than they can get them. Nextel was not making anymore to operate. And even thou part of the merging agreement, Nextel had set aside a certain funds for the rebanding only, it well exceed the funds. And the rebanding is still going on as we speak. So with that and acquiring IPhones, Sprint dug its grave deeper.

13. DonkeySauce

Posts: 194; Member since: Dec 03, 2011

Right, absolutely no compatibility between Sprint and Nextel. That's part of why the merger was so awful. That, and the fact that it was just carried out horribly. Now that Sprint is finally dumping iDen, it's a whole new headache..

5. vvelez5

Posts: 623; Member since: Jan 29, 2011

People just don't understand that Deutesch Telekom wants to get rid of T-mobile. The ones complaining that AT&T purchasing it would eliminate competition and that "it isn't right" or "it isn't fair" seem to have miss the point that DT doesn't want T-Mo anymore. Now if this does ever go through then instead of the #2 company buying the #4 company, this turns into the #3 buying the #4 company that is possibly merging with the #5 company. Eliminating 2 companies instead of the previous deal which would eliminate 1. Regardless, I am for any of this happening because if a company wants to sell and a company is willing to buy then there shouldn't be a problem. The issue comes up that since we had government intervention with the previous deal then AT&T has every right to complain about this, if it ever does happen. Since Sprint got to complain to big brother, then AT&T has the ability to as well. Stupid really, instead of companies making themselves better to become the top company they go complain to the FCC and the DOJ about that it's unfair another company is purchasing spectrum to improve their company. We all lose in the end.

14. VZWuser76

Posts: 4974; Member since: Mar 04, 2010

I'd have not problem with a Sprint & T-Mobile merger. The problem I had was with AT&T & Verizon conitinuing to get bigger through acquisitions. No matter what they said, if the AT&T-Mobile thing went through, we would've seen Verizon go for Sprint. With a Sprint & T-Mobile merger you have 2 companies that have always offered an alternative to the Big 2. I wish either were in my area to give Verizon some competition, but I've got Verizon where I am and the edge of AT&T service about 10 miles away. And the Big 2 always price things pretty much the same, so it'd be nice to see someone with some strength shake things up.

16. vvelez5

Posts: 623; Member since: Jan 29, 2011

My point is, that DT wants to sell T-Mo and they should be able to sell whoever is willing to buy. I dont have a problem with any merger the problem is that since Sprint complained to block the previous merger then AT&T has every right to complain to big brother about this one, if it does happen. Instead of businesses competing you have businesses complaining to government over something not being "fair"

7. Kaze105

Posts: 21; Member since: Feb 15, 2012

I see some interesting things if this is true, probably just bad things though. It will make sprint/tmobile on par with Verizon and AT&T. I guess the bad thing about it is due to a decrease in competition, prices may increase or even offers such as tmobile as low cost or unlimited for sprint will be gone. Being on part with the the big two will allow the sprint/tmobile to try to get a larger revenue instead of trying to increase customers with offers. It may help the customer regarding coverage or speed, but I doubt it will help customers regarding price. Someone with more knowledge of these companies could correct me if im wrong.

8. snowgator

Posts: 3614; Member since: Jan 19, 2011

T-Mo & Metro aren't approved, Sprint & Softbank aren't approved, and we are worried about what's next? Slow news day.

9. skymitch89

Posts: 1451; Member since: Nov 05, 2010

In the long run, this would be good for Sprint and its customers. I also think that Hesse and Son should be co-CEOs of Sprint. Also, if T-Mo & Metro combine, then T-Mo will have over 42 million subscribers, which would still make it 4th carrier in the US. But if Sprint & T-Mo were to combine, then Sprint would have about 98 million subscribers and become 2nd largest carrier in the US.

10. johnny9000

Posts: 50; Member since: Sep 10, 2011

T-mobile is a GSM network, Sprint is CDMA, this merger would be a nightmare confusion of changing technologies and network building. Is it possible? Yes. Will it ever happen? It would take 7-10 years to make it happen. Those companies could go belly-up long before it ever happened. T-mobile is already gambling big-time with the Metro buy (another company with conflicting tech). T-mobile, in it's current form, will cease to exist eventually, that much I'm sure, but it's not going to be in the form of a Sprint merger.

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