With Sprint merger off the table, T-Mobile enjoys the spotlight
Days after it was reported that Sprint had dropped its bid to acquire T-Mobile US, T-Mobile is enjoying the opportunity to let customers know its accomplishments.
The dust has barely settled on Sprint's failed acquisition of T-Mobile US. But that hasn't stopped T-Mobile's eccentric chief executive John Legere from taunting his rivals via Twitter, notably tweeting that T-Mobile will overtake Sprint in total customers by the end of the year.
This follows T-Mobile's announcement Wednesday that it has now overtaken AT&T, Verizon, and Sprint to become the No. 1 US wireless provider for prepaid customers. T-Mobile US, owned by German telecommunications company Deutsche Telekom, has marketed itself to customers as the "Uncarrier," aggressively promoting its low-cost pricing plans and requiring no annual service contracts. "Americans are voting with their feet, and they’re joining this Un-carrier revolution by the millions," Mr. Legere said in a company release.
Earlier this week, Sprint, the No. 3 US wireless provider, backed out on a bid to acquire T-Mobile US, the No. 4 US wireless provider, after facing severe opposition from US regulators who have made clear their desire to see four competitive wireless providers in the US market.
"Four national wireless providers is good for American consumers," Federal Communications Commission chairman Tom Wheeler said in an e-mailed statement to The Wall Street Journal. "Sprint now has an opportunity to focus their efforts on robust competition."
But now, with that merger off the table, the two wireless companies are already heading in very different directions – a divergence that's being publicly helped along by Legere's slew of taunts that he seems to enjoy lobbing at his rivals.
While Legere misses few opportunities to personally publicize his company's accomplishments, Sprint is also making moves to reinvigorate its company's culture, beginning with the announcement of Marcelo Claure, founder of the wireless company Brightstar Corp., as the company's next president and chief executive officer. Contrary to T-Mobile, which has been adding record numbers of subscribers through promotions and campaigns, Sprint has been shedding customers due to problems that have arisen as the company upgraded its wireless network to the latest 4G LTE technology. That transition caused complaints among customers about network quality and caused many to opt instead for AT&T, Verizon, or T-Mobile, The New York Times reports, noting that the company lost 245,000 subscribers in its most recent fiscal quarter.
For the time being, however, it does not look as though Sprint will be gunning for a different acquisition.
"In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace," Mr. Claure said in a statement. "While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint."
Meanwhile, T-Mobile has been courted by other potential buyers, as Deutsche Telekom is reportedly looking to sell its American assets. The French upstart wireless provider Iliad made a $15 billion cash offer for a 56.6 percent stake in T-Mobile US, though Deutsche Telekom is apparently not interested in the offer. Still, it has not completely ruled out a possible deal with Iliad, reports The New York Times.
-Material from Reuters was used in this report.