LAS VEGAS --T-Mobile USA's Chief Executive John Legere sees more
consolidation in the U.S. telecom industry, and wants T-Mobile to
be ready.
The company, a unit of Deutsche Telekom AG (DTEGY, DTE.XE) is
acquiring MetroPCS Communications Inc. (PCS), in a deal that would
combine the fourth and fifth largest U.S. wireless carriers. The
deal is part of a wireless industry that is merging to compete with
the biggest players, AT&T Inc. (T) and Verizon Wireless, which
dominate market share and continue to grow.
Sprint Nextel Corp. (S) , the No. 3 U.S. carrier agreed to sell
a 70% stake to Japan's Softbank Corp. (9984.TO) for about $20
billion in October in a deal that will bolster Sprint's balance
sheet. Sprint has also moved to buy the remainder of Clearwire
Corp. (CLWR) that is doesn't own, although that bid was complicated
Tuesday when Dish Network Corp. (DISH) made a higher offer for the
smaller mobile broadband company.
"There will be more, there will definitely be more," Mr.Legere
said of the recent dealmaking during an interview at the Consumer
Electronics Show in Las Vegas Tuesday. T-Mobile is accelerating its
network overhaul and revamping its service plans in effort to
turnaround the struggling carrier.
The CEO said the changes mean that any merger discussions would
come from a position of strength.
With Sprint, Clearwire, Dish and others, the consolidation is
necessary for the execution of their strategy, he said. "We don't
need consolidation to survive."
T-Mobile is working hard to turn around its business, after
steadily losing valuable postpaid subscribers, with the hope of
stemming customer loss in 2013 and reigniting growth in 2014.
Prior to joining T-Mobile, Mr. Legere was chief executive of
internet provider Global Crossing. He had worked for Global
Crossing for a decade and Deutsche Telekom wanted his experience as
both a long-term manager and someone who can handle dealmaking, he
said.
He joined the company looking for a fight, he said, and while
Deutsche Telekom has viewed his methods as "a little American,"
they "knew what they were getting into" when they hired him.
"I wouldn't be their choice if we just were going to be a U.S.
subsidiary," he said.
Mr. Legere expects there could many different scenarios for more
industry deals. He declined to comment on whether T-Mobile would
eventually merge with Sprint, something that many in the industry
think is inevitable. Last month, MetroPCs' Chief Executive Roger
Linquist said such a combination "has to happen at some point."
"If it was today, the government wouldn't allow it. If it was
six or 12 months from now, maybe it would," Mr. Legere said.
AT&T attempted to buy T-Mobile USA for $39 billion in 2011, but
the deal was scuttled because of regulatory concerns.
He noted that many scenarios could still occur for deals between
existing wireless players, or from outside companies that are
interested in the wireless space.
"My point to Deutsche Telekom always was: we create this plan
and we start to execute. If there is a transaction at some point in
time, significant billions of dollars of incremental value will be
accretive to your shareholders because of the momentum that you
have," he said.
-Write to Thomas Gryta at thomas.gryta@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires