January 7, 2020
T-Mobile's incoming CEO said that "right is on our side" in the company's ongoing efforts to overcome a lawsuit seeking to block the company's proposed merger with Sprint.
"We're very anxious to see the judge's verdict," added Mike Sievert, president and COO of T-Mobile, in comments today during an investor relations event. Sievert is in line to take over the CEO spot from outgoing chief John Legere in April.
Sievert, along with the rest of the US wireless industry, is waiting for US District Judge Victor Marrero to render a verdict in the antitrust "trial of the century." The trial pits roughly a dozen state attorneys general (AGs) against lawyers for Sprint and T-Mobile, which are seeking to merge. The state AGs argue that such a combination will reduce competition in the US wireless industry, which will ultimately raise prices for consumers. The companies, on the other hand, argue that the market will remain competitive thanks to Comcast, Dish Network and other companies that either are preparing to enter the space (Dish) or have already done so through an MVNO (Comcast).
All that said, T-Mobile's Sievert continues to leave open the possibility of a settlement between Sprint, T-Mobile and the opposing state AGs. When questioned whether he would consider some kind of settlement, he said: "Of course. It's never off the table."
However, he didn't indicate that any kind of settlement was in the offing.
Sievert's comments on the topic occurred moments after Fox Business reported that Sprint and T-Mobile could join forces with the US Department of Justice on an appeal of any ruling from Judge Marrero that would block the merger. The outlet reported that the companies haven't made a decision about an appeal, and are still waiting to see how the judge might rule.
Several Wall Street analysts believe that the judge ultimately will side with the state AGs and will move to block the merger. The judge's ruling on the topic is expected sometime in February.
Plan B, C and D
If the judge does indeed block the merger, Sprint and T-Mobile will be left with some difficult choices. As Fox Business reported, they could attempt to appeal the ruling, but that would again delay a transaction that has already dragged on far longer than Sprint and T-Mobile had initially planned.
During Sievert's appearance today at the Citi 2020 Global TMT West investor conference, he and other T-Mobile executives were asked to speculate about what the operator might do if it ultimately was blocked from merging with Sprint.
T-Mobile CFO Braxton Carter said the operator plans to immediately initiate a $9 billion stock buy-back program if its proposed merger with Sprint falls apart. He also said that obtaining more spectrum "would be a priority" for the company.
T-Mobile's technology chief, Neville Ray, said that the operator would look to potentially acquire C-Band spectrum or 3.5GHz CBRS spectrum. He declined to discuss T-Mobile's millimeter-wave (mmWave) spectrum strategy given the FCC's ongoing Auction 103 of mmWave spectrum licenses. FCC rules forbid auction participants like T-Mobile from discussing the topic to prevent coordinated bidding.
"We're not in a terrible position," Ray noted of T-Mobile's spectrum holdings, but he added that T-Mobile and the rest of the US wireless industry remain hungry for additional midband spectrum like the CBRS band and the C-Band. "It's going to take some time for the US to develop this midband 5G story," he said.
Finally, T-Mobile's Carter did hint at the operator's potential interest in regional acquisitions if its merger with Sprint was blocked. He suggested there could be some "wonderful synergies" from such a transaction.
Although most of the nation's larger regional wireless players have been acquired over the course of the past decade, there remain a few major standalone players in the space including U.S. Cellular, Shentel and C Spire, which all have more than 1 million wireless customers each.
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