Home Uncategorized How will John Legere’s departure as T-Mobile CEO affect the Sprint merger?

How will John Legere’s departure as T-Mobile CEO affect the Sprint merger?

How will John Legere’s departure as T-Mobile CEO affect the Sprint merger?

John Legere and Mike Sievert

Source: Android Central

John Legere is stepping down as T-Mobile CEO effective May 1, 2020. Legere will remain on the T-Mobile Board of Directors and has stated that he isn’t leaving the company and has no intention of moving to troubled start-up WeWork. Either way, next spring T-Mobile will have new leadership.

Current company president, board member, and Chief Operating Officer, Mike Sievert, will become the new face behind the company, though Sievert isn’t really new. He’s been a T-Mobile executive since 2012 and, according to Legere, an integral part of the company’s amazing turn-around.

These are things we know. Another thing we know is that Sprint and T-Mobile hope to have their $26.5 billion merger finalized in “early 2020,” which is right around the time of Legere’s planned departure. And finally, we know that the company being handed off to Sievert is a fair bit different than the one Legere inherited in 2012.

The man behind the curtain

John Legere

Source: Android Central

John Legere may not be the best business mind of our times, but he is responsible for one of the biggest turnarounds in the 21st century: saving T-Mobile from the chopping block.

T-Mobile was all but written off after the failed AT&T acquisition, with parent company Deutsche Telekom unwilling to invest in a company that was losing subscribers at an alarming rate. But using the money T-Mobile gained from the failure-to-merge clause, and Legere’s grating-yet-spellbinding personality, T-Mobile has become a company that turns a tidy profit. Legere is a showman — a stark contrast to the expensive suits and reserved demeanor of the “average” corporate CEO — and with his carnival-barker style, was able to call attention to T-Mobile’s tantalizingly affordable cell service plans.

Legere is obnoxious, loud, and unhinged at times. And customerslovehim because of it.

As the money poured in, it was wisely reinvested in infrastructure that served areas in which people actually lived. A nationwide service plan is a must-have, but the parts of the nation where paying customers are located in bulk are the parts that make money. T-Mobile isn’t interested in covering 90%+ of the country — it’s interested in covering 99% of the people who live in it. This fact wasn’t lost on Legere, who relished in reminding customers and competition alike that T-Mobile offered service as good or better than the rest without the hefty price.

Again, most people know about how T-Mobile under Legere’s leadership was able to save itself from being sold off a piece at a time. But how important was Legere to the equation? Very, I’d wager. His attitude and antics drew attention like no other CEO in mobile could dream of doing. Verizon is under very capable leadership who keeps the company in the black, but Legere was able to draw people away by promising his magic beans were real, and then actually delivering. The man is a showman first, CEO second, and that’s what a floundering company like T-Mobile needed.

There is no doubt that Legere played a big part in T-Mobile’s turnaround.

Rumors say that Softbank, the Japan-based company that owns Sprint, also felt this way. It “knew” that a merger between Sprint and T-Mobile would mean a better network for someone like Legere to leverage as he told us how to stick it to the man by changing service providers. 5G everywhere, the best network gets better, the lowest prices and other half-truths could work when Legere was the one saying them. To put it plainly: people love the guy because he doesn’t seem like yet another stuffed-suit CEO.

All of this turned into rapid growth and more power in shaping the market. And at the surface, it seems like it was all Legere’s doing.

Player Two

Mike Sievert

Source: T-Mobile

Mike Sievert will make a fine CEO, that has to be acknowledged. He currently plays a bit of straight man to Legere’s schtick, and it’s obvious that he not only knows plenty about how to operate a mobile network but is a big part of the whole “Uncarrier” persona T-Mobile has built for itself. But he is not John Legere.

Sievert seems like a healthy dose of “Legere light” and that might be what T-Mobile needs now.

That’s both a good and bad thing. Without knowing how much of a part Legere will play in the future of any Sprint/T-Mobile merger, losing the CEO who could turn wackiness into an actual business model will change public perception of the brand. We know Legere will poke at Verizon and AT&T in his own unique way at any opportunity, but we’ve yet to see how an unleashed Sievert will react. Having been hand-picked and groomed by Legere for seven years, chances are we’ll see more of the same, but how will it go over with the Facebook crowd is the big question.

The company Sievert is inheriting is also a very different T-Mobile than the one he joined in 2012. The days of double-digit customer growth and retention are gone and with the mobile landscape the way it is today there is no hope of them returning. That means Sievert can’t rely on the same day-to-day tactics that Legere used to siphon away unhappy or unwitting customers. In short, Sievert will have to actually work hard to maintain the level of profit T-Mobile’s board and shareholders are used to having.

The big “if”

The one place where Sievert can make a difference is in the courtroom. Imagine the stark contrast between Legere and his trademark hoodie answering questions from a panel of regulators and lawmakers and Sievert, looking well-groomed as always, then imagine the difference in the answers to those questions. Sievert could be a wildman who throws legendary parties in secret, but healwaysappears professional with a hint of boyish charm under the spectacles and the smile.

More: The T-Mobile-Sprint merger is facing a multi-state lawsuit

This is important because there are still stumbling blocks in the way of the upcoming merger. Some State’s Attorneys rightfully have questions about how a proposed merger with Sprint would affect U.S. mobile consumers and someone at the corporate level needs to provide just the right answers to get the “final” final approval. What better way than having the soon-to-be new CEO answering them with thoughtful answers?

So, good or bad?

T-Mobile growth

Source: Bloomberg

I think the Sprint merger will be Legere’s legacy to T-Mobile. His brash attitude helped earn the cash flow that makes it possible, his connection with customers will act as a bit of a blinder to the downsides, and his ability to make executives at AT&T and Verizon squirm if and when it happens will be newsworthy. Once the merger is done, we’ve reached peak Legere and there is nothing left for the man to accomplish. Except do the same thing at another Softbank holding, like WeWork. Which is totally not happening. Totally.

With Sievert waiting in the wings, there is an air of sanity and stability that state lawmakers will be happy to see. He’ll be able to help convince attorneys that the New T-Mobile isn’t going to gouge consumers (too much) and that it won’t use its new market power to drive us back to a time when service providers thought of customers like cattle.

I’m still not very keen on the idea of any merger between Sprint and T-Mobile, but the news that Mike Sievert will be the CEO — and likely the chief executive of any merged company — brings nothing but good news for those who are in favor of it. A little bit of CEO restraint can go a long way.

Previous articlePrep for hectic holiday travel with Macy’s sale on Samsonite luggage
Next articleAfter signing a big food additive deal, cell-based protein company Geltor is looking for at least $50M


Please enter your comment!
Please enter your name here