Wall Street seems to have really liked the idea of Sprint and T-Mobile tie up.
Shares of both companies tumbled on Wednesday morning after reports emerged that Sprint is canceling its planned takeover of T-Mobile, the fourth largest wireless carrier in the U.S.
Sprint reportedly canceled the talks due to anticipated regulatory hurdles, the same roadblocks that torpedoed AT&T’s plans to buy T-Mobile in 2011 for $39 billion.
Sprint, the third largest carrier in the U.S., replaced longtime CEO Dan Hesse as CEO earlier today, news that was first reported by Re/code. Sprint board member Marcelo Claure, the 43-year-old founder and CEO of Miami-based wireless distributor Brightstar, is taking the top job.
“Marcelo is a successful entrepreneur who transformed a start-up into a global telecommunications company. He has the management experience, passion and drive to create the strongest network and offer the best products and services in the wireless industry,” said Sprint Chairman Masayoshi Son in a press release. “While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier.”
T-Mobile CEO John Legere — the outspoken and bombastic leader who has turned around the carrier through a number of bold moves — had been rumored to be Sprint’s choice to lead the combined company. In June, Legere told GeekWire that consolidation in the industry was likely.
“I know what we’ve done in the last year-and-a-half is a small inkling of what real competition is like,” Legere said. “In order to keep it going, there’s things we need in the long term — scale, spectrum, etc. And one way to get those is consolidation.”
Sprint is sitting on a pile of spectrum, in part through its acquisition of Clearwire. And T-Mobile may still be in play as the fourth largest player, though it is starting to catch up to Sprint in terms of subscribers with 1.5 million net subscribers added in the second quarter. Who could buy T-Mobile? One possible suitor is satellite TV company Dish Network, which lost out on a bid for Clearwire and Sprint last year.
Previously on GeekWire: Why T-Mobile should delay selling to Sprint — or anyone else