T-Mobile's Legere doesn't rule out Sprint deal, but also casts doubt on it

LAS VEGAS--T-Mobile US (NYSE:TMUS) CEO John Legere didn't outright deny rumors of a potential deal with Sprint (NYSE:S), but he also seemed to throw cold water on the idea by insisting that the T-Mobile brand is going to be around for the long haul and also by disparaging Sprint and its network.

In comments during and after a press conference here Wednesday at the 2014 Consumer Electronics Show, Legere and his fellow executives danced around the idea of a deal with Sprint but also knocked their competitor for its network and strategy.

"I can tell you that the T-Mobile brand, attitude, and identity is here to stay," Legere said, according to The Verge. He added: "What we're doing, in any [acquisition] scenario, will prevail."

"The consolidation in the industry has been about spectrum," Legere said, according to CNET. "All the rumors are about spectrum. But they (Sprint) are spectrum with no legs. The T-Mobile brand and people will stay. How that plays out remains to be seen."

Last month the Wall Street Journal reported, citing unnamed sources, that Sprint is studying potential regulatory concerns of a deal with T-Mobile, and it might make an offer in the first half of 2014 for T-Mobile that could be valued at as much as $20 billion.

"While chatter around T-Mobile/Sprint consolidation is not new, Legere's comments highlight [management's] appetite for a deal," New Street Research analyst Jonathan Chaplin wrote in a research note. "However, what is unclear is [T-Mobile parent Deutsche Telekom's] appetite for a deal given the regulatory backdrop or how well this message actually resonates with regulators."

At the press conference Legere said that "Sprint is a pile of spectrum waiting to be turned into a capability. Right now, their network is completely horrible." A Sprint spokesman declined to comment.

Both Legere and T-Mobile CTO Neville Ray said that T-Mobile's LTE network is now the nation's fastest, and consistently the fastest, and that Sprint's network modernization program has taken too long. T-Mobile's LTE network now covers 209 million POPs and the carrier has started deploying 20x20 MHz configurations for LTE, with Dallas as the first market.

Legere also said that Sprint is "an impaired brand right now" and that Sprint's tri-mode LTE Spark service amounts to "people in lab coats talking about what's going to happen when my daughter is president of the United States."

Sprint said this week it is expanding its Spark service, adding six new markets including the Texas cities of Austin, Dallas, Fort Worth, Houston and San Antonio, as well as in Fort Lauderdale, Fla. Spark is now available in 11 markets. Sprint aims to deploy LTE on 1900 MHz spectrum to 250 million POPs by mid-2014, 150 million POPs covered on its 800 MHz LTE by the end of 2014 and 100 million POPs with 2.5 GHz LTE by the end of 2014. Sprint aims to bring Spark to the top 100 U.S. markets during the next three years.

Ray said that Spark right now is not being heavily marketed. "They don't want to sell it to you," he said, before using an expletive to describe it.

Sprint CEO Dan Hesse said earlier this week at an investor conference here that "you'll be seeing Spark-specific messages, marketing plans and what have you on a city-by-city basis."

"At some point in time, we haven't determined when," Sprint will engage in national marketing for Sprint Spark, he continued. But Hesse said the operator has not yet determined the "magic number" of markets or POPs covered that will cause marketing to evolve from a local to a national basis.

For more:
- see this CNET article
- see this The Verge article
- see this separate The Verge article
- see this Geekwire post

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