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T-Mobile owner sees carrier's finances as unsustainable, while Legere calls it nonsense

Matt Hamblen | Jan. 21, 2015
Outspoken T-Mobile CEO John Legere on Tuesday used Twitter to again slam recent opinions that his company's financial future is unsustainable, given the billions of dollars needed to buy more wireless spectrum to compete with AT&T and Verizon Wireless.

Hoettges' comments don't suggest that a selloff is more imminent than it has been over the past few years. "I don't think Deustche Telekom will sell off shares, and right now T-Mobile is making a net profit," Entner added. "Only when Deustche Telekom comes to the realization that nobody wants to buy T-Mobile, that will be a really bad sign."

What is most important from Hoettges' remarks is the concentration and wealth that both AT&T and Verizon hold, said Bill Menezes, an analyst at Gartner. "If the FCC's concern is maintaining four national U.S. cellular carriers, Softbank/Sprint is not the only path to which T-Mobile can access the wealth and spectrum it needs to grow and remain competitive," Menezes said. "Even though Deutsche Telekom wants to exit its U.S. market investment at some point, Vodafone, American Movil, Dish Network and others clearly have an interest in the U.S. market and one or both of the assets — wealth or spectrum — that Hoettges has tagged as necessities. Sprint is not the only game to play."

Entner said the next U.S. president will decide whether it is important to hold onto four national carriers or allow for three.

"If a Democrat is elected to the White House, we'll have four or more national carriers, and if it's a Republican, we'll probably see three carriers," Entner said. The next president will choose the next chairman of the FCC, as did President Obama in picking Tom Wheeler as FCC chairman.


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