Sprint Shelves Bid for T-Mobile, Calls in New CEO
After languishing in regulatory limbo for months, a proposed merger between Sprint and T-Mobile is now off the table. And in its new future as a lone entity, Sprint will replace CEO Dan Hesse with billionaire entrepreneur and board member Marcelo Claure, the company confirmed this morning.
While Masayoshi Son, chairman of SoftBank, which owns Sprint, previously said that a merger would enable the companies to justly compete with an existing duopoly between AT&T and Verizon, antitrust regulators ultimately feared the acquisition would lessen options for consumers in an already concentrated wireless industry, reports The Wall Street Journal.
Shares of Sprint -- which has posted consecutive annual losses since 2007 -- were down 18 percent as of 11:30 a.m. ET today.
The picture at T-Mobile, however, looks slightly brighter. In addition to adding more than 4 million customers over the past year, other companies reportedly have their sights set on scooping up the self-proclaimed “Uncarrier.” These include French telecommunications operator Iliad and Dish Network, according to the Journal.
The latter deal would bear a striking resemblance to AT&T’s $48.5 billion purchase of DirecTV earlier this summer.
In addition to rejiggering its prices later this year, Sprint is hoping to reinvigorate its team -- which Son has said in the past suffers from a “loser” mentality -- with a brand new leader. Claure, who founded the multibillion dollar mobile distributor Brightstar in 1997, will assume his new post on Aug. 11, Sprint said.
“[Marcelo] has the management experience, passion and drive to create the strongest network and offer the best products and services in the wireless industry,” Son said in a statement. “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.”
“While consolidating makes sense in the long-term,” Claure added, “for now, we will focus on growing and repositioning Sprint.”