Let me just put it out there -- as ridiculous as it seems, as blatantly anti-competitive as it can possibly be, I actually think there's a chance that this deal between T-Mobile (TMUS) and Sprint (S) can get done.
Yep, I believe the U.S. government might actually approve this deal, because it's being put together by the one man who can sway everyone and actually be credible. It's being put together by the greatest salesperson of our era -- T-Mobile CEO John Legere.
First, let me just say that I've known John forever, from way back to his Global Crossing days a dozen years ago. He's made outrageous promise after outrageous promise; he's put forth one ridiculous claim after another. And every one -- every single one -- has been borne out or come true.
The growth, the quality, the presence, the ... dare I say, Millennials -- they all believe in Legere because he's the anti-CEO. And you'll need an anti-CEO to get through the antitrust thicket that awaits him and Sprint CEO Marcelo Claure, who, while an odd "man of the people" given his CEO title, will certainly help the cause. After all, Claure has a more genuine nature than just about any other CEO around.
Now, when I first heard that Sprint and T-Mobile were actually trying to merge, I didn't want them to waste people's time. We have enough of that already.
I mean, Baker Hughes (BHGE) and Halliburton (HAL) couldn't get their merger through regulators with a host of promises. Walgreen's Boots Alliance (WBA) had such a hard time buying even a chunk of stores of failing Rite Aid (RAD) . And of course, the U.S. government is trying to block the merger of AT&T (T) Time Warner (TWX) despite the fact that after that last quarter, AT&T needs this deal badly for the cash flow.
If all of that faced antitrust opposition, then how in heck can a Sprint/T-Mobile deal pass muster? After all, it's going to raise prices, cut back stores and corporate spending and cause a huge job shrinkage, all in the name of enriching German and Japanese companies (given T-Mobile's Deutsche Telekom lineage and Sprint's SoftBank ties)?
But then you read the two companies' manifesto -- and it is a bit of a manifesto -- and you watch the video they put out. You hear the claims, knowing that Legere always backs up his claims. And you start believing in a small kernel of your brain that this deal would be good for America, create a huge number of jobs, put us back in the lead on 5G and actually lower your phone bill. I'm not kidding.
I read through the merger materials twice, once from the beginning and once from the end. I suggest you do the same. If you try it backwards, you'll quickly see: "This combination will create a fierce competitor with the network scale to deliver more for consumers and business in the form of lower prices, more innovation and a second-to-none experience."
Why not believe that's true? It's what Legere did when he bought Metro PCS, where he added three times the workforce when most industry watchers thought he would do the opposite.
I know I doubted Legere when he said he could take customers away from AT&T and Verizon (VZ) -- or what I call "Dumb and Dumber," interchangeable depending on the day. After all, John had an inferior network that didn't even span the country.
But he promised me that he would build a superior network and make those two into endless market-share donors and would be responsible for all of the growth in the industry. And guess what? That's exactly what's been happening.
So, yes, this man gets the benefit of the doubt. That's why when Legere claims there will be more investment, more jobs, better service and lower prices thanks to a Sprint/T-Mobile deal, I actually find myself believing him. It's been wrong to doubt him on his promises.
Best of all, Legere is coming out swinging at all of the objectors in a way that only he can. First, he's saying it's not four U.S. mobile-phone companies that this deal will turn into three. He says it's actually five going to four, as he notes that Comcast (CMCSA) recently added more wireless customers than AT&T and Verizon combined.
Second, Legere points out that rural America has been radically underserved, which he says would end with this merger. Third, he says AT&T and Verizon currently dominate business and government services four-to-one, but that this deal would end that hostage-taking.
Fourth, Legere says that our country can pull ahead in 5G innovation because a combined Sprint/T-Mobile will spend $40 billion to build 5G out. Which is, of course, why there will be more people hired -- including those who will staff the combined company's two current headquarters (no shutterings!) if regulators approve this merger.
Yes, it's true that this deal could come down to a court case, like the proposed AT&T/Time Warner merger. But unlike that one, this deal is being positioned as if President Donald Trump himself authored it.
That's how positive it is for America, for innovation, for the consumer and for jobs. It's wild, it's outrageous ... and it's brilliant. And just like John Legere himself, it just might work.
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