The nation’s third- and fourth-largest wireless carriers have announced they will not seek to merge, ending months of speculation about the two companies’ fates amid a frenzy of competition and consolidation in the telecom and media industries.
T-Mobile said Saturday that while the company believed a merger with Sprint could have been beneficial for consumers, it is ultimately more confident in its ability to go it alone.
“We have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” said T-Mobile Chief Executive John Legere in a statement.
The collapse of the talks is a blow to Sprint Chairman Masayoshi Son, who has repeatedly sought — without success — to meld his carrier with T-Mobile.
Many analysts predicted that T-Mobile would take over Sprint, turning around the beleaguered company and using the combined firm’s scale to go after Verizon and ATT, the nation’s two dominant wireless carriers. But Wall Street reports earlier this week highlighted disagreement between the two companies over how much the deal should be worth.
Sprint now faces a tougher road ahead as it must confront its years of neglecting its network infrastructure, analysts say.
“We are not bullish on the operational turn-around,” said Jonathan Chaplin, an industry analyst at New Street Research, in a note Monday. “At least not without a significant investment in the network, which Sprint has been unwilling to make until now.”
A potential Sprint/T-Mobile tie-up would have been dogged by regulatory concerns. Since 2011, federal officials have signaled that they believe having four nationwide wireless providers, not three, will best preserve competition in the industry.
[The wireless industry is competitive, the FCC finds. But some wonder for how long.]
As recently as last month, officials at the Justice Department who would have been charged with overseeing a Sprint/T-Mobile merger proposal were said to have been skeptical of the plan.
Both ATT and Sprint have sought to merge with T-Mobile in the past. But beginning in 2013, T-Mobile launched a series of initiatives that transformed the wireless business. Its “Un-carrier” program promised to do away with traditional contracts and early termination fees. T-Mobile then followed up by introducing free international roaming and other perks.
The moves kicked off an ongoing period of growth for the company, seemingly validating regulators’ argument for a four-player market. Last month, T-Mobile announced that it had added 595,000 subscribers between July and September, beating its other rivals in what it said was the 15th straight quarter of industry-leading expansion.
Sprint, meanwhile, has been a straggler, ceding its position as third-largest carrier in 2015 to T-Mobile. Despite controlling a considerable swath of commercial spectrum — the invisible airwaves required to carry cellphone signals — Sprint’s network is considered the weakest of the bunch. Analysts had pointed to the costs of integrating the two networks as one of several factors that could make the deal less attractive.
Sprint chief executive Marcelo Claure said Saturday that in light of the setback, his company will look to corporate partnerships as a way forward.
“As convergence in the connectivity marketplace continues, we believe significant opportunities exist to establish strong partnerships across multiple industries,” said Claure in a statement. “We are determined to continue our efforts to change the wireless industry and compete fiercely. We look forward to continuing to take the fight to the duopoly and newly emerging competitors.”
A T-Mobile/Sprint deal would also have come at a politically sensitive time as President Trump has aggressively promoted an “America First” agenda. A Sprint/T-Mobile deal, according to analysts, would have involved the slashing of tens of thousands of retail jobs as the companies consolidated their brick-and-mortar footprints.
The two wireless carriers are foreign-owned; T-Mobile by German communications giant, Deutsche Telekom, and Sprint by Son and his enormous Japanese conglomerate, Softbank. Analysts had said that although regulators typically focus solely on the economics of a proposed deal, blocking it could have given Trump a rhetorical victory.
President Trump and first lady Melania Trump wear leis as they arrive at Joint Base Pearl Harbor-Hickam Hawaii on Nov. 3. Trump begins a five-country trip through Asia, including Japan, South Korea, China, Vietnam and the Philippines. (Andrew Harnik/Associated Press)
TOKYO — President Trump offered a brief overview of his five-country, 12-day trip to Asia as he flew from Honolulu to Tokyo on Saturday, telling reporters that he expects to meet with Russian President Vladimir Putin while abroad, plans to pressure other leaders to take a tougher stance on North Korea, and thinks he is embarking on his visit to China from a position of strength.
Trump was in buoyant spirits Saturday, wearing an unbuttoned, open-collared white shirt with no tie, and appearing in the press cabin unexpectedly to “say hello” near the end of a roughly eight-hour flight to Japan, before he touches down for a full day of meetings Sunday with Japanese Prime Minister Shinzo Abe.
The president confirmed speculation that he might meet with Putin while in Asia, saying: “I think it’s expected we’ll meet with Putin, yeah. We want Putin’s help on North Korea, and we’ll be meeting with a lot of different leaders.”
[Four reasons Trump’s Asia trip is so important]
Trump’s relationship with Putin, as well as special counsel Robert S. Mueller III’s probe into possible collusion between the Trump campaign and Russia, has dogged Trump since the day he took office. Last week, Mueller indicted three people in Trump’s orbit — two senior campaign aides and one lower-level, unpaid volunteer — as part of his ongoing investigation.
But the president, who has often expressed admiration for authoritarian leaders, has remained reluctant to criticize Putin, and the two men have two potential opportunities to cross paths near the end of Trump’s trip — at the Asia-Pacific Economic Cooperation summit in Vietnam, or at the East Asia Summit in the Philippines.
Trump has also taken a tough line on North Korea, a rhetorical stance he is expected to maintain while in the region. The president said he plans to decide “very soon” whether to label the country a state sponsor of terror, but asked whether he had a message for the people of North Korea, he offered only encouraging words, calling them “great people.”
“They’re industrious, they’re warm, much warmer than the world really knows and understands,” he said. “They’re great people and I hope it all works out for everybody. And it would be a wonderful thing if it could work for those great people, and for everybody.”
And he seemed unconcerned about the prospect that North Korea might use his trip to the region to demonstrate its military might by firing a missile. “We’ll soon find out,” he said. “Good luck!”
[What to look for during Trump’s landmark Asia trip]
The president promised that trade will also be a key focus of his trip, with China — a frequent target of his trade-related ire — looming largest on the economic front. Chinese President Xi Jinping recently consolidated power at his nation’s Party of Congress, and Trump is preparing to face a newly emboldened Xi on his home turf.
Trump, however, argued that as president of the United States, he will enter any negotiations or meetings with Xi on similarly strong footing, saying, “I think we’re going in with tremendous strength.”
When a reporter asked him about Xi’s elevated position, the president cut off the questioner, saying, “Excuse me, so am I.” He then rattled off a laundry list of highlights of U.S. power, including the surging stock market, low unemployment and success in combating the Islamic State in the Middle East.
“I think he’s viewing us as very, very strong, and also very friendly,” Trump said. “But we have to do better with trade with China, because it’s a one-way street right now and it has been for many years. And we will. But the reason our stock market is so successful is because of me. I’ve always been great with money, I’ve always been great with jobs, that’s what I do. And I’ve done it well.”
The president also expressed enthusiasm for his meetings with Philippines President Rodrigo Duterte, who has been criticized for his record on human rights and the bloody drug war roiling his country, but with whom Trump maintains a warm relationship. “I look forward to seeing him,” he said. “I look very much forward to seeing him.”
Trump’s already long trip — to which he unexpectedly added an extra day Friday when he announced that he would stay in the Philippines a final night to attend the East Asia Summit — is expected to be grueling. George H.W. Bush, the last president to embark on such a lengthy trip to the region, in 1992, came down with the flu, and in something of a minor international incident, collapsed into the lap of Japan’s prime minister.
Asked whether he had any tips for staying fresh, Trump replied: “I don’t know. I’ll let you know if I don’t stay fresh. If I don’t stay fresh, you’ll be the first to tell me. I’ll stay fresh.”
[Trump arrives in Hawaii ahead of his five-country tour of Asia]
The president, who is known for his reluctance to stray far from home, seemed enthusiastic about the trip. In Hawaii, he played eager tourist, solemnly presiding over a wreath-laying ceremony at Pearl Harbor.
And Saturday on the plane, he joked repeatedly with reporters. He is scheduled to play golf Sunday with Abe and Japanese golf star Hideki Matsuyama, who is also known as a strong long-ball hitter, and Trump teased reporters not to trust him if he returns boasting of his stroke.
“I hit the ball pretty long,” Trump said. “I promise you one thing: I won’t be hitting it there. If I come back and say I was longer than him, don’t believe it.”
He also noted that he will spend the first anniversary of Election Day 2016 in China, and facetiously invited his traveling press corps to join him in the festivities. “Can you believe it is almost exactly one year? We’re going to be in China — together,” he said. “We’ll have to celebrate together, Nov. 8. I hope we’ll all celebrate together. In fact, I was going to have a big celebration party, and then I said, ‘Well.’ But we’ll celebrate together.”
Asked about a new book about former presidents George H.W. Bush and George W. Bush, in which they sharply criticize Trump, the president showed uncharacteristic restraint.
“The Bushes? I’ll comment after we come back,” he said. “I don’t need headlines. I don’t want to make their book successful.”
