T-Mobile on Monday announced transition plans for when its outspoken chief executive John Legere steps down next year, with current president and COO Mike Sievert taking the helm in May 2020.
Legere, who helped shape and shepherd T-Mobile into a forceful third wireless competitor over his seven-year tenure, currently plans to remain on the board of directors when his contract expires at the end of next April. Sievert will become T-Mobile president and CEO effective May 1, 2020, a decision that’s part of what’s been a multi-year succession planning process.
In addition, current CTO Neville Ray is being promoted to president of technology, and current CFO Braxton Carter is extending his contract to help with the transition until at least July 1, 2020.
And no, Legere’s not leaving to head up WeWork. He officially put to rest recent widespread reports that he had been in talks to become CEO of the troubled coworking startup owned by Sprint parent SoftBank.
“I want to be clear, I was never having discussions to run WeWork,” Legere said on a call with investors and media. “Because we had this announcement pending, I couldn’t say that because it wasn’t complete enough, but it did create a weird, awkward period of time.”
Sievert, who was one of Legere’s first hires when he joined T-Mobile in 2012 and held the role of CMO before his promotions to president and COO, is “the absolute right choice” for the chief executive spot Legere said. Both reiterated that Sievert is committed to T-Mobile’s "Un-carrier" strategy, and nothing has changed regarding the pending merger with Sprint.
“I’m really pleased that [Sievert] will be at the helm for the next chapter of the company’s growth. He’s been there every step of the way, leading the design and execution of 16 Un-carrier moves and helping make this company what it is today,” Legere said. “Mike is 100% committed to continuing the un-carrier strategy. T-Mobile will continue to be a disruptive force in wireless and beyond and today’s news just ensures that we will be disruptive, and we know who’s going to lead that disruption.”
“The Un-carrier culture, which all our employees live every day, will not change. T-Mobile is not just about one individual,” said Sievert in a statement. “Going forward, my mission is to build on T-Mobile’s industry-leading reputation for empowering employees to deliver an outstanding customer experience and to position T-Mobile not only as the leading mobile carrier, but as one of the most admired companies in America.”
As to the timing of the announcement, Legere said T-Mobile had always expected to do it now, but acknowledged it had also been expected that at this point a merged Sprint-T-Mobile would’ve been operating for about six months already.
It’s also not coincidental that news comes ahead of the Dec. 9 trial start date against a coalition of state attorneys general who are suing to block the deal.
Legere noted that with his contract ending in April, one argument at trial would likely be that T-Mobile’s numerous promises (conditioned on deal approval) could fall by the wayside under potential new leadership that might not be committed to the strategy.
That includes the most recent commitments unveiled earlier this month, promising free wireless service for first responders, broadband access for families with school-age children and a low-cost $15 for 2 GB prepaid plan.
“The second John is done, Mike Sievert is coming in and he not only believes and supports, he jointly hand-in-hand created and architected these Un-carrier moves,” said Legere. “That’s the why now - trial starts Dec. 9 - we want that done before then, we think it’s a pertinent fact.”
Legere noted the new pledges were “well received” by state AGs, adding, “These are areas they’re all quite strongly interested in, we’re continuing to have very good dialogue with them.”
Last week T-Mobile announced New York, which alongside California is leading the states’ merger opposition, will be home to a second new customer experience center in the state once the deal is done. T-Mobile promised to employ union workers to help construct the two New York facilities, and Legere on the call also mentioned recent positive talks with heads of labor.
“All of these ships might just merge in the right direction,” said Legere, and reiterated he feels “quite good” that T-Mobile has a basis for settling the deal, and reiterated equal confidence in winning at trial.
In terms of Plan B if the deal doesn’t go through, Sievert said the company would return to its familiar strategy, including potential stock buybacks and looking into the marketplace for “other opportunities for spectrum.”
Wells Fargo analysts said the succession announcement didn’t come as a surprise, but provides more certainty.
“Sources note TMUS had a recent Board meeting just last week and we believe such transition removes uncertainty (especially given recent WeWork / Legere headlines – which he denied today),” wrote the Wells Fargo team in a Monday note to investors. “As TMUS President, Mike Sievert has taken a very public role with the Street with an extremely strong track record in the wireless space.”