T-Mobile US CFO Braxton Carter cheered the incoming administration of President-elect Donald Trump, arguing that less regulation—including the dismantling of the FCC’s net neutrality rules—and less onerous corporate taxes would be “positive for my industry.”
However, Carter declined to address a potential merger between Sprint and T-Mobile, a transaction that industry observers have speculated may be possible under a Trump White House.
“It’s hard to imagine, with the way the election turned out, that we’re not going to have an environment, from several aspects, that is not going to be more positive for my industry,” Carter said in comments this morning at the 44th Annual Global Media and Communications Conference. “I think that it’s very clear that there’s going to be less regulation. And less regulation—regulation often destroys innovation and value creation.”
He added that the United States has “one of the highest tax burdens on corporations in the world,” a situation he expects to ease under a President Trump.
As for the potential for more mergers and acquisitions in the space: “It’s hard to imagine that there’s not going to be more openness to consolidation,” Carter said. “Given the changes that are coming, I really do think you’re going to see a lot of evolution and a lot of excitement.”
Carter was asked specifically about the possibility of consolidation in the wireless space, with the number of nationwide wireless network operators decreasing from four to three—a question that likely referred to a merger between Sprint and T-Mobile, which was stymied by President Obama’s FCC.
“It’s too early to tell,” Carter said of such a situation. “But I do think that the point I made earlier, we will sit back and chuckle that there would only be four players in this marketplace,” Carter added, explaining that other players including cable operators would likely look to enter the wireless industry.
Although Trump’s specific agenda for telecom remains unclear, most expect the incoming president to generally relax regulations on businesses and lower corporate taxes, as well as potentially repeal the FCC’s net neutrality rules that essentially forbid internet service providers from favoring or blocking specific products and services.
Carter also specifically addressed the issue of net neutrality, arguing that the reversal of the FCC’s Open Internet rules would pave the way for additional innovation in the space. “It would provide the opportunity for significant innovation and differentiation,” Carter said of a telecom industry without net neutrality rules. “You could do some very intersecting things” without net neutrality.
Carter added that T-Mobile took care with its Binge On service to toe the FCC’s net neutrality guidelines, which are based on Title II parameters.
“With Binge On, unlike what AT&T is doing with zero-rating their own proprietary content [with DirecTV Now], it was open to everybody, and that's the way that we were highly confident that we comply with all aspects of regulation, and the whole opt-out functionality,” Carter said. “We were very careful with the way that we threaded that needle. And we're pretty happy with the way that it turned out. But with Title II [potentially] being overturned, there are a lot of really interesting things that you could potentially do. But we’ll see what happens. It's going to be a really interesting year next year."
In other T-Mobile news, Carter said the carrier continues to make progress building out its 700 MHz spectrum licenses, a process he said would eventually open up a signification amount of new territory for T-Mobile to cover. He explained that the carrier’s ongoing network buildout would eventually allow it to sell its services in a third of the United States in which it does not currently operate.
“We’re very, very excited about it,” he said.
Specifically, Carter said that during 2016, T-Mobile was able to build new retail stores and sales outlets in 400 new locations. He said for T-Mobile’s MetroPCS prepaid brand, that number was 1,000 new locations in 2016.
Next year, though, Carter said T-Mobile expects to reach an additional 30 to 40 million new potential customers by building out 1,000 new T-Mobile sales locations and 1,500 new points of distribution for MetroPCS. “It gives you a huge tailwind of growth,” he said.