Uncertain T-Mobile/Sprint merger is giving John Legere price hike 'nightmares'
The man widely considered responsible for T-Mobile's astonishing growth these last few years might have one foot out the door after an industry-disrupting reign of more than seven years over the "Un-carrier", but before passing the CEO baton to current COO Mike Sievert, John Legere needs to complete one final daunting task.
convince the DOJ, FCC, and as many state AGs as possible to support a $26.5 billion mega deal between his (current) company and Sprint, Legere's entire legacy now rests in the hands of one New York federal judge.Of course, there are some things the nation's number four CEO (as ranked by Glassdoor earlier this year based on reviews from employees) can't control, and after working tirelessly since April 2018 to
aiming for a resolution of the highly publicized trial by Christmas. In response to allegations that the creation of a "New T-Mobile" giant could increase prices for consumers and even indirectly benefit Verizon and AT&T as well, Magenta brought out its star witness on the stand right off the bat.Said judge asked the 13 state attorneys general and the AG for the District of Columbia that challenged the DOJ and FCC-approved merger between the nation's third and fourth-largest wireless service providers to present their case as quickly as possible,
Legere's "worst nightmare" may come to life soon
After tooting his own horn in recapping some of the "Un-carrier" moves that boosted T-Mobile's reputation and subscriber base since becoming CEO back in 2012, as well as admitting Dish was seen at one point as a viable candidate for a similar merger as the one pending final approval by the courts now, John Legere reportedly cranked up the drama on Friday in talking about the potential consequences of a failed union with Sprint.
T-Mo's CEO believes the mobile network operator may well be forced to raise wireless service prices in the not-so-distant future to "slow user growth and relieve network stress" if the deal ultimately falls through. In other words, Legere is (again) arguing that T-Mobile needs Sprint's spectrum just as badly as the latter needs the former's money to survive in the Verizon and AT&T-dominated wireless landscape.
Obviously, the fear is not that T-Mobile will go out of business without Sprint, but its mid and long-term 5G rollout plans rely hugely on the "Now Network's" mid-band technology. Legere's "worst nightmare" essentially calls for a situation where T-Mo's network wouldn't be able to expand at a fast enough pace in the next couple of years to keep up with the demands of its ever-growing customer base.
A scenario in which the merger is blocked for good by this current legal confrontation seems more and more likely to come to pass, but Legere's almost apocalyptic predictions are themselves challenged by Magenta's adversaries. In their view, T-Mobile could obtain the spectrum required to prevent its network from clogging up in many different ways.
Dish is still the key piece of the puzzle
As it becomes increasingly clear the price hike argument is impossible to settle in an unbiased and unambiguous fashion, the court's ruling could end up hinging entirely on the role Dish Network will play in an eventual merger. If Senior US District Judge Victor Marrero can be convinced Dish has serious plans to take Sprint's place as the industry's number four player, the verdict is likely to come in T-Mobile's favor.
If, however, the unused wireless spectrum hoarded over the years by the satellite TV provider will prevail as a major factor demonstrating the company's lack of interest in rivaling Verizon, AT&T, and T-Mobile, the states have a much bigger chance of winning. At the end of the day, there's really no way to anticipate with absolute certainty how cellular plan prices might be impacted by the closing or blocking of the $26.5 billion deal. Legere can't do that (especially on his way out), Sprint's execs cannot be trusted with an objective forecast, and the states have no idea what will happen in two, three, or five years either.
Otherwise put, the merger is hanging by a thread, so keep that popcorn nearby and be sure to continue following all the drama as we inch closer to the epic conclusion of the wireless industry's greatest ever soap opera.