DT CEO ups US ambitions to double down on momentum

Deutsche Telekom CEO Tim Hoettges is looking to close the valuation gap between T-Mobile US and its rivals, as the telco revels following a very positive earnings call.

Share price in the German telco has jumped 3.9% in early morning trading following the financial results which saw revenues increase by 6.4% to €80.4 billion for 2019. Net profit was up by almost 80% to €3.9 billion, while free cash grew by 15.9% to €7 billion.

“The market environment in the European telecommunications sector is far from straightforward. Yet, despite the heavy regulation and inconsistent competitive situation, we emerged from the year just ended even stronger,” Hoettges said his letter to the shareholders.

“Not only that, but we are once again the leading European telco, based on both revenue and market value. That was and remains our overarching goal.”

Deutsche Telekom is one of the largest telcos across the world, but in recent years it is questionable as to whether it is one of the more progressive or future proofed. When looking at the penetration of full-fibre broadband or deployment of 5G infrastructure, the numbers are not as favourable, though the tide does seem to be turning.

The team now suggests 5G connectivity is being delivered in eight cities in its domestic German market, with ambitions to increase this to 20 by the end of 2020. Elsewhere, T-Mobile US launched its 5G offering in December and Austria has 31 5G base stations up-and-running.

Deutsche Telekom is heading in the right direction, but it is moving at a much slower pace than other telcos. It might want to proclaim itself as a leader in the telco arena, but realistically it is a fastish-follower at best, BT for example, has already launched 5G in 50 towns and cities across the UK.

One area where the company is proving to be incredibly aggressive is in the US, and this should continue over the coming months.

“We have the chance to become No.1 in the United States, to overtake AT&T and Verizon. That, at least, is our ambition,” Hoettges said during the earnings call.

With T-Mobile US and Sprint now looking at a clear path to the finish line, after a District Judge ruled in favour of the merger in the face of opposition from 13 Attorney Generals, the team can look further into the future. Following the merger, T-Mobile will be roughly the same size from a subscriber base as AT&T and Verizon, allowing more opportunity for the team to compete on a level playing field.

The US business is one which is once again proving to be very profitable for Deutsche Telekom.

T-Mobile US is the single largest business unit in the overarching business, accounting for just over 50% of the total revenues at €40.4 billion, a year-on-year increase of 10.7%. Momentum is clearly with the business also, the team boasted of 1.3 million branded postpaid net additions during its last financial results.

While the US is looking very positive for the telco, it will have to be careful sluggish activity in Europe does not open the door for rivals to steal market share in the various markets.

New York ends resistance to T-Mobile/Sprint merger

New York Attorney General Letitia James has announced her office will not pursue an appeal against the courts decision to approve the $26 billion T-Mobile US and Sprint merger.

While the other states involved in the lawsuit to prevent the combination of the two telcos are yet to formally make their position public, James was the primary driving force behind the legal opposition. Others might try to step up, but without one of the US’ fastest growing political forces at the helm, responses look relatively pitiful.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case. Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.

“We are gratified that this process has yielded commitments from T-Mobile to create jobs in Rochester and engage in robust national diversity initiatives that will connect our communities with good jobs and technology. We are committed to continuing to fight for affordability and access for all of New York’s mobile customers.”

James’ opposition to the $26 billion merger first emerged in June 2019 when, alongside California Attorney General Xavier Becerra, support was raised for a multi-state lawsuit against the corporate transaction. James managed to convince 12 State Attorney Generals to oppose the deal, questioning whether it would be beneficial for the consumer and attempting to disprove that Dish would not be adequate as a fourth mobile operator.

In a 173-page opinion, Judge Victor Marrero effectively said the merger was a good idea as Sprint was not worthy of being called competition. The combined entity would be a much better representative, while Marrero believed Dish plans to scale rapidly were viable, even if few others do. His ruling effectively killed the resistance to the merger.

Although some will be disappointed the lawyers are giving up the fight, it might simply be a case of looking at the bigger picture. James has pointed to job creation promises in her state, though now the attention will turn to ensure these jobs are actually created. Back in October, Colorado and Mississippi both did the same; the legal opposition was dropped as agreements were forged with T-Mobile US and Dish to offer benefits to the states.

While there will be some benefits to the transaction, it is impossible to avoid the negatives. T-Mobile US and Sprint will be able to realise efficiencies to better compete with AT&T and Verizon, while Dish will offer more jobs. However, there will be a rationalisation project after the transaction leading to job losses in shared business functions (finance, legal etc.) and also in areas where the retail footprint overlaps. Redundancies are unavoidable.

The question which remains is who will get the best slice of the benefits?

Colorado agreed to drop the lawsuit against the merger if Dish was to create 2,000 jobs in the statey and will also keep its corporate HQ in the city of Littleton for at least seven years. The Attorney General has also negotiated an accelerated 5G deployment timeline with T-Mobile US in exchange. Over in Mississippi, former-Attorney General Jim Hood also negotiated an accelerated 5G deployment plan and also a ceiling on tariffs for consumers for a five-year period.

These were the only two states to drop out prior to the conclusion of the lawsuit, though now the lobbying for attention can begin as T-Mobile/Sprint and Dish are wooed by each of the states for their own benefit. James has said the deal offers new jobs to citizens in Rochester, New York, though with other states considering more legal action, T-Mobile US and Dish might have to hit the negotiating table elsewhere.

In California, Attorney General Becerra is considering his options, while Ken Paxton, the Attorney General for Texas, has not stated whether he will pursue an appeal to the decision. These might not be the catalyst for opposition that Letitia James is, but they will certainly be able to cause a problem. T-Mobile US, Sprint and Dish executives want this deal done, are will probably be willing to negotiate some attractive deals.

T-Mobile US finishes the decade with another 1m net phone additions

The final quarter of 2019 was one which certainly did not let T-Mobile US down, as the team boasted an additional 1 million postpaid phone net additions, taking the customer base up to 86 million.

While the firm still lags behind the leading duo in the US, AT&T and Verizon, CEO John Legere will likely be exiting the office on a high. Seven years in charge, and the business is looking remarkably different from the dreary days of 2012.

“T-Mobile delivered another incredible fourth quarter with strong customer growth, despite a very competitive environment – and we did it while lighting up the country’s first nationwide 5G network and working to close our merger with Sprint,” said Legere.

“7 million net customers have chosen to join the Un-carrier movement in 2019, and they are choosing T-Mobile because we treat them right, we eliminate their pain points, and we are changing the rules of this industry for customers everywhere.”

For the moment, this is a preliminary view of the final quarter of 2019, and as such financial figures have not been included. The subscriber numbers might also vary, though these are likely to be very accurate.

For the final three months of 2019, T-Mobile US can account for 1.9 million net additions in total, 1 million of which are branded postpaid phone net additions. An additional 300,000 customers were brought in through sales of wearables or tablets, 77,000 net additions were added to the prepaid column, while another 472,000 wholesale connections were added to the T-Mobile US network.

Looking across the whole of 2019, T-Mobile US added 7 million customers to its ranks, taking the total up to 86 million subscriptions across all segments. For the year, the team is suggesting 3.1 million branded postpaid phone net additions and 339,000 branded prepaid net additions.

Of course, the objective of this business is to compete with the likes of AT&T and Verizon.

T-Mobile US AT&T Verizon Sprint
Subscribers (total) 66,503 92,892 93,922 40,939
–       Postpaid 45,720 75,152 89,739 31,942
–       Prepaid 20,783 17,740 4,183 8,997
Net additions 1,747 10 112 385

*Subscriber numbers taken from most recent financial results

Looking at the number of consumer post- and pre-paid subscriptions of the major telcos in the US, AT&T and Verizon are clearly still the dominant force, but T-Mobile US is not that far behind. Then of course you have to add in the Sprint subscriptions (assuming the merger runs smoothly over the next few months), and it will almost certainly be on par.

These numbers do not tell the whole story of course. AT&T and Verizon have significant bets in both the broadband and content world, as well as a presence in IOT. The profits of the wholesale business units, which make notable contributions to both Sprint and T-Mobile US are also not included.

When you take out all the corporate rhetoric, exaggeration and misdirection, and simple look at the numbers there are two interesting takeaways. Firstly, John Legere has done a remarkable job to evolve T-Mobile US from a poor-mans telco which was an acquisition target of AT&T, to a connectivity behemoth which competes in the top table of the US digital rankings.

T-Mobile US is competitive today, but tomorrow presents a new market dynamic; 5G. While all of the telcos are pondering the implications of mmWave connectivity, T-Mobile US has a weapon its rivals cannot compete with; a monstrous hording of low-band 5G spectrum. It might not provide the high-speed of mmWave, but it does offer coverage. It will be interesting to see what impact this has on the attractiveness of T-Mobile US’ 5G proposition in comparison to rivals.

The second point to consider is competition. With three telcos scaled towards 100 million subscribers once the T-Mobile US and Sprint merger is completed, the credibility that Dish can compete in this market as a fourth, comparable and legitimate option is severely undermined.

Dish CEO claims it can compete from Day One

Dish CEO Charlie Ergen has been sitting in a New York court room to defend the approval of the T-Mobile US-Sprint merger, but also insisting his company can compete in the cut-throat telco industry.

This week is a critical one for executives in both the T-Mobile US and Sprint businesses. For the next few days, these men and women will be face-to-face with the 14 Attorney Generals, led by New York’s chief prosecutor Letitia James, in a court case which will decide the future of the business.

With approvals being granted by the relevant regulatory authorities, the last hurdle the duo has to navigate is the lawsuit from the Attorney Generals. These 14 lawyers oppose the merger on the grounds of competition, but Ergen is the star witness for T-Mobile US and Sprint.

“We will compete with the largest operators in the United States, and we’ll compete from day one,” Ergen said in court.

Ergen believes the Dish mobile business will be live within 30 days of the T-Mobile-Sprint merger being approved. At this point, Ergen will get his hands-on Sprint’s prepaid business, Boost. The brand will continue in the pre-paid market for the short-term, though Dish plan to move into the post-paid segment sharpish.

This is perhaps what the judgement will lie on. Will the court believe Ergen? Can this CEO convince Judge Victor Marrero that Dish is a viable alternative to the Sprint business which currently exists?

Looking at the positive side of the argument, Dish has spectrum. It has been competing in the spectrum auctions for years and has a treasure trove, which is currently under threat. Dish has been told to use it or lose it. Another interesting factor is the financing; Ergen claims to have $10 billion lined-up in loans from the banks. Then there is the agreement with T-Mobile US. For the next seven years, Dish will be able to make use of the T-Mobile US network where it hasn’t deployed its own.

These are all interesting points to consider, but then you have to look at the other side of the equation.

Dish has never been in the mobile business. Will it be able to get an effective mobile service up-and-running within 30 days? We’re not too sure. Is $10 billion enough to fulfil the grand promises which have been made to gain approvals from the authorities? If Sprint currently has 50 million subscribers, will the Dish mobile proposition ever reach this mark to maintain the current levels of competition across the US?

These are all queries which will need to be answered. Ergen will be placed under cross-examination from the Attorney Generals, and there are plenty of threads to tug on to unravel this story.

The question which remains is can Ergen prove Dish is a viable replacement for Sprint to maintain the competitive environment which is present today? That is the question which this case rests on.

5G over low frequency spectrum seems to be a waste of time

T-Mobile was able to claim the first US 5G network thanks to its 600 MHz spectrum, but it immediately started managing-down expectations, so what was the point?

Multiple reports are claiming TMUS has been telling its excited punters that the speed increase with 5G will be, on average, around 20%. That’s a pretty major anti-climax after all the hype suggesting 5G would be ten times faster and all that. As ever with the tendency of US operator marketing departments to massively over-promise, they have to confront the facts on the ground sooner or later.

Having said all that it’s important to stress that early tests of the TMUS 5G network have, at times, yielded speed increases far greater than that average (which also implies there are other times there will be now increase at all, or even a decrease). PC Mag has done a good job of initial testing and found results vary according to the expected factors such as distance from the cell and time of day.

PC Mag concludes that, while TMUS’s 5G does represent an upgrade over its 4G service, the improvement is neither so great nor consistent enough to get too excited about. Elsewhere VentureBeat, Cnet, and Slashgear offer similarly nuanced reports that all agree there’s a limited amount to get too excited about at this stage.

Meanwhile the Houston Chronicle was so underwhelmed it had a bit of a moan to TMUS and got the following statement in response. “In some places, 600 MHz 5G will be a lot faster than LTE. In others, customers won’t see as much difference. On average, customers with a 600 MHz 5G phone should see a 20 percent download speed boost on top of what T-Mobile’s LTE network delivers, and with the New T-Mobile they can expect that to get exponentially faster over time, just like we saw when 4G was first introduced.”

That’s all fair enough but it still feels like a pretty major climb-down from all the utopian noise we’ve been getting the US about 5G. TMUS even had the nerve to attack its competitors for over-hyping 5G earlier this week, only to then release the above statement. While there is some special sauce in 5G NR, the main bandwidth improvements are derived from simply using the fatter pipes available at higher frequencies.

The reason there’s all this spectrum available at higher bands is that it’s pretty rubbish for telecommunications. It has short range and poor propagation characteristics. So while the use of 600 MHz technically enables nationwide 5G, the kind of 5G that has been promised will only arrive once operators have added a zillion small cells to transmit higher frequencies and that won’t happen for a while.

Verizon, T-Mobile, and US Cellular lied on 4G coverage but will get away with it

Buried in the depths of a FCC press release, the authority has said Verizon, T-Mobile, and US Cellular exaggerated on 4G coverage maps but no punishments are being considered.

As part of the Mobility Fund Phase II, telcos were given federal support for rolling out 4G services to rural and underserved areas. This cash was supposed to bridge the digital divide, and as part of the agreement, the telcos were obliged to provide accurate coverage maps to ensure the cash was being spent in the right manner.

Following an investigation into the initiative, it was found Verizon, T-Mobile, and US Cellular misled the FCC on their 4G footprint. Data was presented to the Commission exaggerating the extent of 4G coverage, in other words, these three telcos were not spending federal money as promised. These telcos were effectively lying to the Commission and the general public.

Interestingly enough, the FCC does not currently have any plans to punish the trio, instead has created a new initiative to apply for federal funds. All three will be invited to apply for the Government hand-out. This is perhaps the latest example of a toothless watchdog, with the bureaucrats in charge in procession of the same spine as a lifeless slug.

The new fund will make $9 billion available to ensure 5G connectivity reaches the areas in the US which the telcos elect to ignore.

“We want to make sure that rural Americans enjoy these benefits, just as residents of large urban areas will,” said FCC Chairman Ajit Pai. “In order to do that, the Universal Service Fund must be forward-looking and support the networks of tomorrow.

“Moreover, America’s farms and ranches have unique wireless connectivity needs, as I’ve seen across the country. That’s why I will move forward as quickly as possible to establish a 5G Fund that would bring next-generation 5G services to rural areas and would reserve some of that funding for 5G networks that promote precision agriculture.”

The announcement of the 5G Fund for Rural America is the very press release the FCC decided to attempt to bury the findings of the report. Considering how much work has been done to disguise the Mobility Fund Phase II investigation, few should be surprised Verizon, T-Mobile and US Cellular will get away with ignoring rules and spending tax payer’s money in an irresponsible manner.

This is a saga which has been on-going for some time, after smaller, rural telcos complained the nationwide players were exaggerating coverage maps. These coverage maps helped the FCC determine who should get a slice of the $4.5 billion reserved for the Mobility Fund Phase II. What is being done to make sure the same abuses do not reoccur is unknown. It does appear nothing right now.

Telcos have shown on numerous occasions they cannot be trusted to act responsibly on their own, but when a watchdog ignores such flagrant disregard for the rules it simply encourages the telcos to push the definitions of right and wrong even further.

The FCC has failed the general public here, the very people it is supposed to serve.

Looking at the 5G Fund for Rural America, the objective is simple. Telcos prioritise deployment in areas which are commercially more attractive, the larger cities and major transport hubs. This is forgivable, these are commercial companies after all not charities, but the federal funds are designed to offset some of the extraordinary expense for network deployment. It is a reasonable way to spend federal dollars when managed correctly.

$9 billion will be set aside for the rural communities, which includes $1 billion which will have to be spent on delivering connectivity solutions for the agricultural industry. With an election on the horizon, this is a very intelligent move. In 2016, President Trump arguably won because he was able to mobilise communities and individuals who were feeling marginalised; in the digital world, farmers fit this description perfectly.

The question which remains is whether the same telcos can be trusted to appropriately spend their allocation of the $9 billion moving forward. Seeing as the FCC is currently proving itself as toothless, there doesn’t seem to be any deterrent to behave, which is an interesting position to be in.

T-Mobile launches America’s ‘first nationwide 5G network’

TMUS finally makes good use of its 600 MHz spectrum to be able to claim the country’s first 5G network with nationwide coverage.

The 5G network apparently covers 200 million people and a million square miles, which isn’t a bad effort. How much 5G wonder subscribers with get from the relatively small chunks of 600 MHz spectrum TMUS is using to achieve this first remains to be seen but, as ever the company itself concedes, it’s a ‘critical first step’.

“5G is here on a nationwide scale,” said TMUS CEO John Legere. “This is a huge step towards 5G for all. While dumb and dumber focus on 5G for the (wealthy) Few, launching in just a handful of cities — and forcing customers into their most expensive plans to get 5G — we’re committed to building broad, deep nationwide 5G that people and businesses can access at no extra cost with the New T-Mobile, and today is just the start of that journey.”

In his usual dry, understated style, Legere is presumably referring to AT&T and Verizon, although he doesn’t indicate which one is dumber. Being the seasoned telecoms exec he is, Legere realised he’d better also launch some compatible phones, so from the end of this week TMUS early adopters can get hold of OnePlus 7T Pro 5G McLaren and the Samsung Galaxy Note10+ 5G for $900 and $1300 respectively.

“The carriers have been over-hyping 5G for years now, setting expectations beyond what they can deliver,” said Neville Ray, TMUS President of Technology. “When Verizon says #5GBuiltRight, they must mean sparse, expensive and limited to outdoors only. Meanwhile at T-Mobile, we built 5G that works for more people in more places, and this is just the start.”

There was lots more noise from them, as you would expect, but you get the message. TMUS is great and everyone else is rubbish and duplicitous. It’s not the most subtle marketing strategy but it seems to be working, so who are we to scoff? It looks like the 5G service doesn’t come at a premium over 4G either, and there’s some kind of extra incentive for people to switch networks, so TMUS seems to be going hard on this one.

Here’s the coverage map and those crazy guys even did a vid.

US is a more attractive investment than Europe – DT CEO

Deutsche Telekom CEO Tim Höttges is always a colourful character, but he hasn’t held back in brutally condemning Europe as we enter the digital age.

“I have 50%, 50% businesses in Europe and the US,” said Höttges at the FT-ETNO Conference in Brussels. “I would love to invest patriotically, but it is better to invest in the US. They want 5G for every citizen as soon as possible, they are bringing a lot of spectrum to the market.”

Europe is a market which has grand ambitions for the digital age, but it is struggling to keep pace with the likes of the US, China and Korea. As it stands, some could argue there is parity for control of digital economy, but it is questionable as to whether this will be the case moving forward.

“I would like to say the future is Europe, but I can’t, at least not unconditionally,” said Höttges.

Governments and regulators are demanding rapid deployment of infrastructure, but consolidation is the dirtiest of words. Scale is critical, but no assistance is being offered. There are positive noises about spectrum harmonisation, but fragmentation is rife. This valuable asset is becoming increasingly expensive with every passing auction. And the legal framework for digital services does not line-up between the telcos and the cloud players.

This is of course yet another example of a telco moaning about regulation, but if the moaning leads to investment being directed elsewhere regulators cannot ignore it for much longer. Höttges is a very honest CEO and today saw a statement which should seriously worry authorities across the continent.

Investors demand DT invests in areas which return the greatest profits, Höttges has a fiduciary responsibility to ensure this is the case. If the US landscape is more likely to generate the required returns, this is where the company will drive investment.

“I invest where I see the biggest opportunity,” Höttges stated.

US authorities and consumers will be thrilled to hear such proclamations. Over the course of 2018, DT investments totalled more than €12.2 billion worldwide. If the US is creating a more investment friendly landscape, regulators are arguably doing their job. This means more money being pumped into T-Mobile US, a company which is already forcing the hands of rivals with disruptive strategies. More money could mean more disruption. Theoretically, this will only benefit the US telecoms industry.

What is worth noting is that DT is not alone in its criticism. Telecom Italia Chairman Salvatore Rossi suggested there has not been enough attention paid to industrial policy. Altice Portugal CEO Alexandre Fonseca complained about market consolidation resistance from authorities when the fourth player accounts for less than 3% market share. Telefonica Chief Finance and Control Officer Laura Abasolo bemoaned shifting regulations; inconsistency is the enemy of investment after all.

These are only a few of the frustrations which were aired today. Some very senior people said some very condemning things, but this is of course not new.

Telcos will always complain about regulation. From their perspective, there are always too many rules, never enough subsidies and spectrum is consistently too expensive. The majority of the time these companies are trying to get more for less, profit is the ultimate goal after all, but occasionally you have to listen to the moaning. The outcome is arguably more important than the process, and this outcome is not beneficial for Europe or DT’s customers.

If investment is being directed elsewhere because the regulatory framework is not working for the continent’s largest telco, the dynamic needs to change, and change quickly.

New York Attorney General maintains opposition to T-Mobile/Sprint merger

The T-Mobile/Sprint merger might have received official backing from government agencies, but New York Attorney General Letitia James is not giving up on her case to block it.

The backdrop to this recommitment to the cause is a slightly unusual one. The press conference itself was focused on a lawsuit which was filed against Juul, an e-cigarette company James is looking to have banned, but the floor was opened-up to ‘any other business’.

“Our case against T-Mobile is an antitrust violation, obviously we’re concerned with anti-competitive behaviour,” said James. “Providing public benefits are good but they do not address the antitrust violation.”

In announcing John Legere will step-down from the top job at T-Mobile US, and outlining the succession plan, T-Mobile US is clearly confident the deal will now pass without complication. However, James is a very interesting opponent.

James comes across as an incredibly ambitious individual, and it might not surprise that many if she decides to run for alternative public office positions. It is too late for James to throw her hat into the ring for next years’ elections, though there will plenty of opportunity for this lawyer to climb the greasy pole of politics.

This is what should worry any of the firms James has cast her eye on. Politicians love a war story, a scalp to display in front of the voting public. Campaign speeches are full of rhetoric of how that individual has selflessly fought for the general public and won. Next time a US politician takes the stage at a campaign rally, note the number of times the following phase (or variant of) is used;

When I was [insert previous position] I fought for the people of [insert place] to [insert social equality example].

If James has grander political ambitions, she will need plenty of war stories. It is a tool in the popularity contest which is politics and fighting against the T-Mobile US/Sprint merger could be a perfect example. The Juul case is another, while James has been pretty vocal in pursuit of President Trump’s tax filings.

James has decided the T-Mobile US and Sprint merger is anticompetitive. The position is relatively simple; more service providers means more competition, which is only good for the consumer. There are of course pros and cons to both sides of the telco consolidation argument, but James has set her position, and this will not be changed. With the trial set to begin on December 9, this saga might come to a close soon.

Legere is on the way out!

One of the most colourful, and successful characters in recent telco history is on his way out of T-Mobile US.

Few CEOs exit a telco with an enhanced reputation, but such is the success of T-Mobile US under his leadership, John Legere has almost completed an impossible to follow act. Perhaps this could be likened to the retirement of Manchester United Manager Sir Alex Ferguson or US tennis superstar Pete Sampras; how do you follow-up such impressive accomplishments?

Legere’s contract will expire on April 30, 2020, with current COO Mike Sievert taking over as CEO. Legere will remain as a board member of the company, tasked with overseeing the transition of the business as Sprint and T-Mobile US merge into a single entity. His future has not been confirmed just yet, though rumours emerged last week he was being groomed for the top-job at shared-workspace giant WeWork.

“John Legere has had an enormously successful run as CEO,” said Tim Höttges, CEO of parent company Deutsche Telekom.

“As the architect of the Un-carrier strategy and the company’s complete transformation, John has put T-Mobile US in an incredibly strong position. I have the highest respect for his performance as a manager and as a friend, I am very grateful to him for the time together.”

While Legere has formed a reputation as one of the more controversial and colourful characters in the US telco space, he should also be remembered as one of the most successful.

When Legere was appointed as CEO in September 2012, T-Mobile was not in an enviable position. Less than a year earlier, T-Mobile US looked like it would be merged into the AT&T business, only for the Department of Justice to step-in on the grounds of competition. At the end of 2012, T-Mobile US and MetroPCS Communications merged to create a consolidated fourth player with more spectrum, scale and investment potential. In 2013, Legere took control of the company’s fortunes with the launch of the ‘Uncarrier strategy’.

Over a six-year period, Legere’s magenta army have introduced numerous ‘Uncarrier’ offers which have proven to be highly disruptive to the US telco industry. For example, Uncarrier 4.0, known as Get Out of Jail Free Card, saw T-Mobile US pay the Early Termination Fees (ETF) of new subscribers, or Uncarrier 6.0 introduced zero-rating downloads for music streaming.

The result was relevance. T-Mobile US challenged the status quo, creating value for customers which rivals weren’t, eventually forcing the industry to evolve. When Legere was first appointed as CEO, T-Mobile US had roughly 33.3 million subscribers, now it commands 84.18 million. In 2012, revenues stood at $15.9 billion for the 12 months, in 2018, this number increased to $43.3 billion.

What will be interesting to see is whether Sievert can follow-up the wild-eyed persona which Legere has made his own. Sievert is a believer in the Uncarrier strategy, he led the marketing campaigns as CMO prior to his appointment as COO, though Legere was the face of T-Mobile US as well as the mastermind of the grand plan.

For example, looking at the social media presence of Legere, his Twitter account has 6.5 million followers, while a quirky Christmas themed message on YouTube in 2015 was viewed 226,266 times. The energetic CEO even fronted a series of cooking videos under the hashtag #slowcookersunday, the lasted video attracted more than 4.8 million watches on Facebook. Legere is the company’s most valuable brand ambassador, and few can replicate the enthusiasm and genuine belief in the message. What impact this will have on the appeal of the newly-merged business remains to be seen.

The future of the T-Mobile US business is at a pivotal point right now. Once the merger gets rolling it will have to convince Sprint’s current subscriber base to stay as a customer of the newly-merged telco, instead of churning to a rival. Churn is unavoidable in this scenario, therefore it will be a case of damage limitation. Unfortunately, the T-Mobile brand will not be able to rely on one of its most powerful marketing assets before too long.

The T-Mobile loss is a significant gain for WeWork, presuming the rumours are true. Though we would now like to point you to a collection of videos from the combative, colourful and cunning John Legere.