Telecom & Wireless
52-Week Low Proves Sprint Needs T-Mobile -- or Something!
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Hesse apparently had the support of SoftBank’s chairman and CEO Masayoshi Son, and then it just disappeared. The likely cause was Sprint’s inability to soften U.S. regulators to the combination of T-Mobile and Sprint. Hesse bet the farm on that and Son went to bat for it in a big way. Federal Communications Commission (FCC) chairman Tom Wheeler said Wednesday morning:
Four national wireless providers is good for American consumers. Sprint now has an opportunity to focus their efforts on robust competition.
The FCC said last week that it would propose new rules for an upcoming auction that would prohibit the two companies from bidding jointly for new spectrum assets.
From the decision to replace Hesse we can infer that Sprint’s board — and Son — did not believe that he had the qualities needed to drive subscriber growth now that the T-Mobile merger is no longer an option. Claure’s history of building a $10 billion company from scratch suggests that he is more likely to do whatever it takes to boost Sprint’s subscriber numbers.
T-Mobile’s identity as the “Uncarrier” was built on its attacks directly at AT&T Inc. (NYSE: T). Verizon Communications Inc. (NYSE: VZ) was forced to make changes to its subscriber plans as well, but it was able to hold out longer. It will be interesting to see which of the two giants Sprint takes on first. Sprint also has to find a way to slow down T-Mobile’s subscriber growth, and that may be more difficult even than stealing customers from the big guys.
Sprint’s stock was down about 18% shortly before noon on Wednesday, at $5.97 in a 52-week range of $5.88 to $11.47. The 52-week low was posted earlier in the morning.
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