T-Mobile's CFO sees more "inorganic growth" opportunities ahead for the carrier -- despite the collapse of the Sprint merger plans -- and noted Dish as a possible partner in a chat Wednesday.
T-Mobile US Inc. CFO J. Braxton Carter chatted about what happens next for T-Mobile during his session at the Oppenheimer 17th Annual Technology, Internet & Communications Conference. He was largely positive about the prospect of a closer relationship with US satellite TV provider Dish Network LLC (Nasdaq: DISH) when asked, noting how the companies' assets could align.
"I think he's a brilliant man," Carter said of Dish CEO Charlie Ergen, who has previously pursued similar wireless deals with Sprint Corp. (NYSE: S) and Clearwire LLC (Nasdaq: CLWR) that never made it to completion. (See Dish Throws in the Towel on Sprint Buy and Dish Cedes to Sprint's Clearwire Bid.)
The appeal of the Dish position is that the satellite provider holds 50MHz of spectrum in the US -- 40MHz in the AWS-4 band and 10MHz in the H-Band -- that is very close to the AWS spectrum that T-Mobile has been deploying its 4G LTE network in.
"We could certainly very rapidly deploy on his spectrum," Carter noted.
This would give the pair the opportunity to offer really large LTE channels for faster over-the-air services, possibly doubling up on the 2x20MHz LTE channels that T-Mobile can offer today. Although Carter noted that the operator will move beyond that by itself anyway, without offering much further detail.
Of course, that would mean striking a deal between the two and -- as Carter noted -- Ergen is a "tough negotiator." Still, he opined, it would be very difficult and expensive for Dish to deploy a wireless network on its own, and the provider is running out of time to strike a 4G deal with a partner.
Talking about the recent "out of right field" $15 billion bid from Iliad (Euronext: ILD), Carter described it as "inadequate" and "not interesting." T-Mobile management, he intimated, feels that the carrier is actually being "undervalued" anyway. (See T-Mobile Rejects Initial Iliad Bid – WSJ.)
However, he allowed that the bid "can develop into other people have that interest and other inorganic opportunities." (See Iliad's Bid for T-Mobile: This Ain't No Joke.)
In the long term, Carter is still clearly looking to a mega-merger to create an operator that can compete with the big two: "The formation of a third-scale national carrier certainly would increase competition," he said.
"The government clearly has a different view," Carter added. (See FCC Could Block Sprint/T-Mobile Spectrum JV.)
The CFO suggested that Sprint must now get the "network piece" together in order to become truly competitive in the marketplace again, noting the ambitions of SoftBank Mobile Corp. CEO Masayoshi Son to make the Sprint network the "best in the world."
"That's going to take years, the amount of densification needed," he stated, stressing that the network performance needs to be there for Sprint to compete.
"Could they get extremely aggressive [on pricing]? Yeah," Carter told his audience. "But what good is that if you just churn [subscribers] right out of the back door?"
"I think its going to take them a while and, in the meantime, we are fully ready for the competition," Carter added.
T-Mobile's CEO John Legere has predicted that the operator will take third place in the US market from Sprint by the end of the year. (See DT Wants Spectrum Favors; Legere Wants Sprint's Slot.)
— Dan Jones, Mobile Editor, Light Reading