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
Optical transport vendors are finding growing business opportunities with web content firms even as their overall market shrinks.
Intel buys ARM processor assets to make it better equipped for the future of mobile equipment and SDN-enabled data center gear.
A Juniper Networks poll finds a little more than half the companies surveyed have SDN deployment plans, while the rest have none.
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.
Flash Poll
From The Founder
It's clear to me that the communications industry is divided into two types of people, and only one is living in the real world.
LRTV Custom TV
Using Service Quality to Drive WiFi Monetization

10|22|14   |   6:51   |   (0) comments


Live from the SCTE conference: Heavy Reading's Alan Breznick explores the forces shaping the WiFi opportunity in an interview with CableLabs' Justin Colwell and Amdocs' Ken Roulier.
LRTV Custom TV
Distributed Access Architectures – 2

10|21|14   |   8:51:00 AM   |   (0) comments


ARRIS CTO Network Solutions Tom Cloonan discusses why many if not most MSOs will continue with integrated CCAP, while addressing why some are also looking at two futuristic, distributed access architectures: Remote PHY and Remote CCAP.
LRTV Custom TV
Distributed Access Architectures – 1

10|21|14   |   9:01   |   (0) comments


SCTE Sr. Director of Engineering Dean Stoneback discusses the pros and cons of distributed access architecture (DAA) and its various forms, which range from basic Remote PHY to full CMTS functionality in the node.
LRTV Custom TV
The WiFi Road to Riches – 2

10|21|14   |   3:58   |   (0) comments


ARRIS Senior Solution Architect Eli Baruch talks about how MSOs can enable public and community WiFi through 1) outdoor access points, 2) businesses seeking to offer WiFi to customers, and 3) residential WiFi gateway extensions.
LRTV Custom TV
The WiFi Road to Riches – 1

10|21|14   |   10:15   |   (0) comments


SCTE Director of Advanced Technologies Steve Harris discusses WiFi deployments, drivers, challenges and advances, including 802.11ac, carrier-grade WiFi, community WiFi, Hotspot 2.0, Passpoint, WiFi-First and voice-over-WiFi.
LRTV Custom TV
Advantech Accelerates 100G Traffic Handling

10|17|14   |   7:56   |   (0) comments


Paul Stevens from Advantech explains why handling 100GbE needs a whole new platform design approach and how Advantech is addressing the needs of equipment providers and carriers to give them the flexibility and performance they will need for SDN and NFV deployment.
LRTV Huawei Video Resource Center
Holland's Imtech Traffic & Infra Discusses Huawei's ICT Solution and Services

10|16|14   |   4:49   |   (0) comments


Dimitry Theebe is from the business unit at Imtech Traffic & Infra which delivers communications solutions for transportations. His partnershp with Huawei began about a years ago. In this video, Theebe speaks more about this partnership and what he hopes to accomplish with Huawei.
LRTV Huawei Video Resource Center
Huawei's Comprehensive Storage Solutions Vital for SVR

10|16|14   |   6:16   |   (0) comments


SVR Information Technology provides cloud services for academic and special sectors. With Huawei's support, SVR and Yildiz Technical University has established Turkey's largest and most advanced High Performance Computing system. CSO Ismail Cem Aslan talks about what he hopes Huawei's OceanStor storage system will bring for him.
LRTV Huawei Video Resource Center
Mexico's Servitron's Impression of Huawei at CCW 2014

10|16|14   |   6:35   |   (0) comments


Servitron is a network operator in Mexico that has been in the trunking industry for the past 20 years. Its COO, Ing. Ragnar Trillo O., explains at Critical Communications World 2014 that his company has been interested in the long-term evolution of LTE technology and its adoption for TETRA.
LRTV Huawei Video Resource Center
Building a Better Dubai

10|16|14   |   2:06   |   (0) comments


Abdulla Ahmed Al Falasi is the director of commercial affairs, a telecommunications coordinator for the government of Dubai. Their areas of service span across multiple industries, including police, safety, shopping malls and more. In this video, Abdulla talks about his department's work with Huawei.
LRTV Huawei Video Resource Center
Huawei Lights Up Malaysia Partner Maju Nusa

10|16|14   |   1:59   |   (0) comments


Malaysia's Maju Nusa is an enterprise partner to Huawei in networking, route switches and telco equipment. At this year's Critical Communications World in Singapore, CTO Pushpender Singh talks about what Huawei's eLTE solutions mean to his company and for Malaysia.
LRTV Custom TV
Evolving From HFC to FTTH Networks

10|15|14   |   2:19   |   (0) comments


Cisco's Todd McCrum delves into the future of cable's HFC plant, examining how DOCSIS 3.1 and advanced video compression will extend its life and how the IP video transition will usher in GPON and EPON over FTTH.
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
February 10, 2015, Atlanta, GA
June 9-10, 2015, Chicago, IL
Infographics
WhoIsHostingThis.com presents six of the world's most extreme WiFi hotspots, enabling the most epic selfies you can imagine.
Hot Topics
Is Health the Killer App for the IoT?
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/22/2014
Drones Hover Over the IoT Sector
Jason Meyers, Senior Editor, Gigabit Cities/IoT, 10/23/2014
Analysts Warn of Major NFV Gaps
Carol Wilson, Editor-at-large, 10/22/2014
Roku Raises $25M, But for What?
Mari Silbey, Independent Technology Editor, 10/23/2014
AT&T: Merger Review Halt Won't Hurt Us
Alan Breznick, Cable/Video Practice Leader, 10/23/2014
Like Us on Facebook
Twitter Feed