T-Mobile is considering all its options for a no-merger scenario
While T-Mobile's top executives have every reason to be pleased with the "Un-carrier's" latest quarterly report highlighting yet another industry-leading customer growth, CEO John Legere and COO Mike Sievert are a little too preoccupied with some burning legal issues to do their usual victory laps.
Ahead of a verdict from District Judge Victor Marrero that could still go either way according to numerous pundits and analysts, Sievert remains optimistic, primarily relying on the fact that "right is on our side" in a court battle against 13 state AGs and the Attorney General for the District of Columbia. This all-Democratic group of seasoned politicians sued to block a merger between the nation's third and fourth-largest wireless service providers that the FCC and DOJ already approved, and after a quick trial in December, no one really knows which of the two parties will ultimately prevail.
Don't rule out a settlement just yet
With closing arguments from both sides scheduled for January 15 and a ruling expected to be delivered sometime next month, you might think it's way too late now for T-Mobile to settle the US wireless industry's "trial of the century" out of court. Especially considering how adamant New York Attorney General Letitia James was just a little while back that T-Mo didn't do enough in its pompous November 7 event to address antitrust concerns.
But Mike Sievert, who is slated to replace John Legere as Magenta's skipper on May 1, hinted that "some kind of settlement" is still possible during an investor relations event on the heels of the company's Q4 2019 earnings announcement yesterday. According to T-Mo's current Chief Operating Officer, the possibility of an agreement behind closed doors is "never off the table", although Sievert was unwilling to elaborate on this cryptic and somewhat curious statement.
It's completely unclear what sort of compromise T-Mobile and its opposers could reach after spending so much time trying to prove each other wrong on arguments relating to competition and prices. It seems more likely that Sievert simply meant his company remains open to exploring every avenue to get the deal done than actual discussions of a settlement taking place as we speak. Like the rest of the nation, T-Mo's head honchos are "very anxious to see the judge's verdict", which will probably happen soon enough.
Contingency plans are in the works
If the $26.5 billion mega deal does not clear this legal hurdle, which Wall Street analysts are reportedly "betting heavily" will ultimately be the case, T-Mobile is now widely expected to pursue a plan B... or C, or even D.
That's in pretty stark contrast to what was reported a few months back, when the merger seemed essentially finalized. While T-Mo would undoubtedly find itself in a delicate position without Sprint's spectrum, there are other ways to obtain the vital technology needed to ramp up its 5G rollout. Chief Technology Officer Neville Ray doesn't think the "Un-carrier" is in a "terrible position" as long as it will manage to snap up some C-Band or 3.5GHz CBRS spectrum in the near future.
A $9 billion stock buy-back program is another top priority for a bleak scenario in which T-Mobile will be banned from purchasing Sprint, while acquisitions of unnamed regional wireless service providers could also be considered, according to Chief Financial Officer Braxton Carter.
Last but certainly not least, T-Mobile and Sprint might be cooking up an appeal as well if Judge Marrero does decide to block their lawful union. What's interesting about that theory is a rumor of the DOJ's possible involvement in the appeal proceedings. The Antitrust Division of the Department of Justice apparently believes so strongly this deal would be good for the industry as a whole that it's thinking about joining forces with the two carriers looking to become one to fight a potential verdict in favor of the states at the Supreme Court level.
Of course, it's too early to know if this rumor will actually materialize, especially as it's unclear if T-Mobile is keen to continue fighting and thus further draw out a process started almost two whole years ago.
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