T-Mobile isn’t settling.
That was the message from T-Mobile CEO John Legere to his employees on Saturday after the Bellevue, Wash.-based wireless carrier ended potential merger talks with Sprint.
“This time around, we could not find an arrangement that meets our high bar — and there’s no need to settle for anything less,” Legere wrote in an email to employees obtained by GeekWire.
T-Mobile and Sprint, the No. 3 and 4 U.S. wireless companies behind Verizon and AT&T, have been talking about merging, off and on, for several years. Sprint’s parent SoftBank nearly acquired T-Mobile in 2014 but the deal fell through after U.S. regulators expressed concerns.
Merger talks heated up again over the past few months and it looked like an agreement was near. But the deal reportedly hit a stumbling block last week because of a disagreement over ownership of a combined T-Mobile/Sprint entity. Reuters also reported last week that the Department of Justice likely opposed the deal.
In the email to employees, Legere said that he remains excited about the company’s future even though the Sprint deal is not happening. Here’s the email:
There are lots of rumors swirling around — some true and some not. Here’s what’s true – T-Mobile has been talking with Sprint about a potential combination of our companies. Today we ended those discussions.
We’re always looking at partnership and growth opportunities to accelerate our business, but any deal we do has to deliver incredible long-term value to our company. That’s no small feat because we have such a bright future on our own as a standalone business. You’ve all worked so hard to put T-Mobile in this position of strength and have the options that we have. It’s incredible! This time around, we could not find an arrangement that meets our high bar – and there’s no need to settle for anything less.
So, what’s next? There’s so much left to do! The Un-carrier mission remains the same. I’ve never been more excited about our future.
In a press release, Sprint CEO Marcelo Claure said the companies agreed that “it is best to move forward on our own.”
“As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries,” he said in a statement. “We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”
Since the initial round of merger discussions, T-Mobile has surged under Legere, passing Sprint in 2015 to become the third largest U.S. wireless carrier.
T-Mobile last month said it added another 1.3 million new customers in the third quarter, its 18th straight period with more than 1 million net customer additions, bringing its total to more 70 million customers. Revenue at the company climbed 8 percent to $10 billion; profits rose 50 percent to $550 million.
Legere and Claure have developed a rivalry over the past few years, with the two chief executives lobbing insults back and forth as the companies jockeyed to be the main challenger to AT&T and Verizon.
A combined company of T-Mobile and Sprint would top 130 million subscribers with a market capitalization of nearly $90 billion.
Some Deutsche Telekom investors want the company to sell T-Mobile, which may face challenges if Sprint partners with a U.S. cable company, Reuters reported. But The Washington Post also noted that Sprint will now face a “tougher road ahead as it must confront its years of neglecting its network infrastructure.”
Legere and Claure were in Tokyo last week; it’s unclear exactly why, but Sprint owner SoftBank is based in Japan. Axios reported that Claure, SoftBank CEO Masayoshi Son and Deutsche Telekom CEO Tim Hoettges had dinner Friday night in Tokyo.
Any guesses on city? pic.twitter.com/J9T4UdT2a3
— John Legere (@JohnLegere) November 4, 2017
— John Legere (@JohnLegere) November 5, 2017
— MarceloClaure (@marceloclaure) November 5, 2017