Light Reading
If Softbank buys T-Mobile, will it remember the old John Legere as it deals with the new version?

Is SoftBank Ready to Reunite With Legere?

Dan O'Shea
1/27/2014
50%
50%

I've found it entertaining to watch the "Cult of John Legere" develop in the last year and a half, though maybe not for the same reasons as the mobile industry insiders who see the outrageous and outspoken T-Mobile USA CEO as an abrasive change agent for an ossified marketplace.

One of the most interesting aspects of Legere's rise as the wireless industry's new rebel saint has been how little, if at all, anyone has mentioned his telecom past. Legere's past reads pretty differently from his current image. It is worth thinking about, amid the growing possibility that SoftBank Corp. could buy T-Mobile US Inc. and merge it with Sprint Corp. (NYSE: S), and possibly even put Legere in charge of the whole thing. (See Report: SoftBank Preps $19B Bid for T-Mobile.)

I followed Legere a little more closely about 10 to 12 years ago, when he emerged as the somewhat unlikely savior of the struggling wholesale fiber network operator Global Crossing (Nasdaq: GLBC). He was then one of a throng of freshly minted CEO candidates from the AT&T Inc. (NYSE: T) school of management, along with Joe Nacchio, Rick Roscitt, Alex Mandl, and Dan Hesse, among others. Legere had risen quickly through AT&T's Asia operations and eventually moved to Asia Global Crossing (AGC), a joint venture between Global Crossing, Microsoft Corp. (Nasdaq: MSFT) and -- here's the bit with present resonance -- SoftBank.

Could that past affiliation with SoftBank help grease the wheels for a deal in which the Japanese giant would buy T-Mobile and merge it with Sprint? I don't know how much of a direct relationship Legere had with SoftBank founder Masayoshi Son, but Legere's general experience working for Asia-focused telecom operations and any other involvement he had with SoftBank folks while at AGC must be worth something, right?

Yet, many past published reports suggest that after Legere won the CEO job at Global Crossing a few months before that company would file for bankruptcy in early 2002, his relationship with the AGC board may have soured. Meanwhile, he came under heavy criticism while in charge of Global Crossing. (See Global Crossing Falls Overboard and GlobalX: The Burst Bubble.)

Why? I'll let you delve into the Los Angeles Times story I linked to above for the juicy details, but here are a couple worth repeating:

  • Shortly before Global Crossing went into bankruptcy protection, Legere reportedly demanded the company pay taxes on $10 million worth of loans that had been extended to him from AGC and subsequently forgiven -- even as other employees who had been shown the door lost their severance payments.
  • Controversially, he simultaneously remained chief executive of both Global Crossing and AGC, and reportedly kept the latter from tapping into a $400 million line of credit from Global Crossing that might have saved AGC from its later bankruptcy filing.
  • Legere reportedly used $500,000 of company money from Asia Global Crossing without first obtaining board approval to settle three sexual harassment suits against him.

There's more, and none of it is new information, but a view of Legere's history that more people should be aware of before they canonize him.

T-Mobile's hero or heretic?
I don't know what has changed personally for Legere that he comes off so differently now, but it seems so rightly suited to T-Mobile's situation -- a company in last place has nothing to lose -- that it's a little hard to believe it's genuine. When you're in T-Mobile's situation, "outrageous and outspoken" is your best way to change perceptions.

A consumer-facing company, unlike Global Crossing back in the day, also requires public demonstrations of customer care, and it helps to be less of a Ma Bell suit-wearing intimidator, and more like someone's casual, foul-mouthed jokester uncle. So, that's what Legere is delivering now.

Does that mean he isn't fully invested in what he's saying or the actions he's taking at T-Mobile? Not at all. Legere took the reins of Global Crossing just before it filed for Chapter 11. He led it back out and stuck with the company for several more years before selling it to Level 3 Communications in April 2011 for $2 billion. In business, that's the definition of a winner. That's exactly what T-Mobile needs to be something other than fourth choice, or to achieve what is probably Legere's more likely endgame -- a sale. (See Level 3 Buying Global Crossing.)

Maybe I'm wrong about Legere. Maybe he's a reformed suit who made it through more than one industry crash by the skin of his teeth and now just wants to strike back at the type of market-choking evil empires that produced the old John Legere. Maybe he is just as pure of heart as some people seem to think he is. To be clear, there were many more people of more questionable character than Legere in the telecom industry a decade and a half ago. Heck, even just inside Global Crossing there were more.

Will SoftBank look past the negative aspects of Legere's time at Global Crossing if it buys T-Mobile? Could the Japanese giant even welcome him back into the fold with open arms and a bigger job?

If SoftBank's business philosophy is something like, "Embrace the devil that you know," then perhaps.

— Dan O'Shea, Managing Editor, Light Reading

(6)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
DOShea
50%
50%
DOShea,
User Rank: Blogger
1/29/2014 | 9:58:57 PM
Re: Shocker!
Yeah, Son is really pushing the case, but there are no guarantees. I don't think Legere is completely about a sale anyway. For all that reportedly happened at Global Crossing, he spent years there. The same could happen at T-Mobile, though it will be interesting to see if he can keep up his current ball-busting antics.
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/29/2014 | 6:11:24 PM
Shocker!
The DOJ reportedly has a dim view of any potential T-Mobile-Sprint merger anyway.

Source: http://online.wsj.com/news/articles/SB10001424052702304691904579349163803939416?mod=WSJ_TechWSJD_NeedToKnow
RitchBlasi
50%
50%
RitchBlasi,
User Rank: Light Sabre
1/28/2014 | 1:43:04 PM
Character
If he is a character, maybe he will next show up on tose USA Network spotlights. characters welcomed.
DanJones
50%
50%
DanJones,
User Rank: Blogger
1/28/2014 | 11:43:39 AM
Re: Legere
If he is playing a role that character seems to be rubbing on other execs at T-Mobile judging by recent press conferences.
KBode
50%
50%
KBode,
User Rank: Light Sabre
1/28/2014 | 9:09:34 AM
Legere
Interesting post with good backstory I wasn't aware of.

I watched his comments on a SoftBank acquisition with great interest, given that while he (and SoftBank) promise to keep T-Mobile's disruptive approach intact after an acquisition, that's generally not what happens with consolidation. Less competition means it's easier for "nod and wink" competition, where nobody really wants to compete on price. I've watched as Sprint's consumer policies slowly but surely matched those of AT&T and Verizon (with a few exceptions, like unlimited data).

Lots of people following the "cult of Legere" might be in for a rude awaking post Sprint acquisition.

 

Is John Legere playing a character?
RitchBlasi
50%
50%
RitchBlasi,
User Rank: Light Sabre
1/27/2014 | 1:31:17 PM
T-Mo or no T-Mo - Which way to go.....
Interesting take on this deal.  Can a leopard change its spots?  Personally, I've never been one to appreciate the sell-n-go guys who seem to hop from company to company - somehow rising through the ranks without any obvious successes.  With my own pedigree in a large carrier/mobile operator, I've seen my share of execs come and go, and some you never heard from again - probably because their golden parachutes were rich enough to sip Pina Coladas on a beach for the rest of their lives.  

While not exactly changing water into wine, Legere should be given credit for the turnaround - the numbers speak for themselves.  Convincing people there is a difference between two-year phone financing and two-year contract would make Houdini proud.  And how many people are really going to change carriers because they can receive free international roaming on sub-par networks?  Not business customers, they have other options from companies like GigSky, OneSimCard, Truphone, etc.

The spectrum and billions-of-dollars from AT&T due to the merger failure had to help out too.  Having someone deposit assets like that into your account offers a lot of wiggle room, especially in the short term.  It will be interesting to see what happens with T-Mo in the long run if the merger doesn't happen.  Some of these actions might put up nice numbers in the short term but over time could cause some angst.

Personally, I believe fewer stronger national mobile networks are better suited to handle the continued growth in mobility, especially as bandwidth intensive services begin taking hold (i.e. all forms of video and VoIP).  All Softbank needs to point to for competition are the dozens of MVNO's currently reselling the services of mobile operators at discounted prices - and making some money in the process.

And for the FCC, the stronger networks would probably make the net neutrality issue a bit easier to handle.  They also need to get that extra spectrum into the market. 

 

 

 

 
Educational Resources
sponsor supplied content
Educational Resources Archive
More Blogs from DOS Attack
The 25G Gigabit Ethernet Consortium looks like a case of companies moving to establish a default standard where the standards process has failed so far.
Light Reading's Big Telecom Event featured plenty of packet-optical activity and discussion.
Check out the second batch of Leading Lights contenders in this category.
Presenting the first six of 12 finalists for the Leading Lights Best Telecom Product award.
Huawei names Ming He to lead its US operations, such as they are...
Flash Poll
LRTV Custom TV
A New Security Paradigm in SDN/NFV

7|28|14   |   02:54   |   (0) comments


Paul Shaneck, Global Director Network Solutions for Symantec, discusses the evolving virtualized network, explaining how Symantec is leading the security discussion as it relates to SDN and NFV, and helping to ensure the network is protected and compliant.
LRTV Documentaries
Sprint's Network Evolution

7|24|14   |   14:59   |   (0) comments


Sprint's Jay Bluhm gives a keynote speech at the Big Telecom Event (BTE) about Sprint's network and services evolution strategy, including Spark.
LRTV Documentaries
BTE Keynote: The Software-Defined Operator

7|24|14   |   18:43   |   (1) comment


Deutsche Telekom's Axel Clauberg explains the concept of the software-defined operator to the Big Telecom Event (BTE) crowd.
Light Reedy
Numbers Are In: LR's 2014 Salary Survey

7|24|14   |   1:25   |   (7) comments


Our fourth annual Salary Survey paints a picture of who's hiring, firing, earning, and yearning for a change in the telecom industry.
LRTV Custom TV
Driving the Network Transformation

7|23|14   |   4:29   |   (0) comments


Intel's Sandra Rivera discusses network transformation and how Intel technologies, programs, and standards body efforts have helped the industry migration to SDN and NFV.
LRTV Custom TV
Distributed NFV-Based Business Services by RAD

7|18|14   |   5:38   |   (0) comments


With the ETSI-approved Distributed NFV PoC running in the background, RAD's CEO, Dror Bin, talks about why D-NFV makes compelling sense for service providers, and about the dollars and cents RAD is putting behind D-NFV.
LRTV Custom TV
MRV Accelerating Packet Optical Convergence

7|15|14   |   6:06   |   (0) comments


Giving you network insight to make your network smarter.
LRTV Custom TV
NFV-Enabled Ethernet for Generating New Revenues

7|15|14   |   5:49   |   (0) comments


Cyan's Planet Orchestrate allows service providers and their end-customers to activate software-based capabilities such as firewalls and encryption on top of existing Ethernet services in just minutes.
LRTV Custom TV
Symkloud NVF-Ready Video Transcoding, Big Data

7|9|14   |   3:41   |   (0) comments


Kontron and ISV partner Vantrix demonstrate high-performance video transcoding and data analytic solutions on same 2U standard platform that is ready for SDN and NFV deployments made by mobile, cable and cloud operators.
LRTV Huawei Video Resource Center
The Evolving Role of Hybrid Video for Competitive Success

7|4|14   |   4:09   |   (0) comments


At Huawei's Global Analysts Summit in Shenzhen, China, Steven C. Hawley from TV Strategies speaks to us about the evolving role of hybrid video for competitive success.
LRTV Huawei Video Resource Center
How CSPs Leverage Big Data in the Digital Economy

7|4|14   |   4:48   |   (2) comments


Justin van der Lande from Analysys Mason shares with us his views on how telecom operators can leverage customer asset monetization with big data. His discusses the current status of big data applications and the challenges and opportunities for telecom operators in the digital economy era.
LRTV Huawei Video Resource Center
Accelerator for Digital Business Future Oriented BSS

7|4|14   |   3:08   |   (0) comments


Mobile and internet are becoming intertwined; IT and CT are integrating; and leading CSPs have begun to transform to information service and entertainment providers. How should the BSS system evolve to enable this transformation? Karl Whitelock, an analyst at Frost & Sullivan, shares his views.
Upcoming Live Events!!
September 16, 2014, Santa Clara, CA
September 16, 2014, Santa Clara, CA
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Packet Design asks network professionals how they handle the cloud, SDN, and network management.
Today's Cartoon
Vacation Special Caption Competition Click Here
Latest Comment
Hot Topics
Cisco Puts a Fog Over IoT
Sarah Reedy, Senior Editor, 7/23/2014
U-verse Growth Slips But Still Strong
Alan Breznick, Cable/Video Practice Leader, 7/24/2014
Is Windstream Boldly Setting a New Trend?
Carol Wilson, Editor-at-large, 7/29/2014
Salary Survey Report 2014
Sarah Reedy, Senior Editor, 7/23/2014
Facebook: 30% of Users Are Mobile-Only
Mitch Wagner, West Coast Bureau Chief, Light Reading, 7/24/2014
Like Us on Facebook
Twitter Feed