After testimony from both T-Mobile and Sprint executives claiming the number four carrier cannot survive without the merger with T-Mobile, Sprint’s former CEO Marcelo Claure flipped the script and claimed the company could be viable on its own.
Bloomberg is reporting that T-Mobile CEO John Legere had previously testified that Sprint’s $40 billion in debt and unfavorable position in the market meant it would be “sold for parts” without a merger. However, when Claure—currently executive chairman of Sprint; COO of Sprint’s parent company, SoftBank Group Corp.; and CEO of SoftBank Group International—took the stand, he had a different outlook.
“Those are possibilities,” Claure responded. “I don’t necessarily agree completely.”
Claure did go on to say that without the merger, the road ahead would be a difficult one and likely require Sprint to leave some markets.
“Sprint two years from now would be a very different from Sprint today, because we would cease to be a national competitor.” Claure added. He also indicated the carrier would likely have to borrow additional money and raise prices.
Similarly, current CEO Michel Combes testified that without the deal, Sprint would have to pull back from some markets, although it would still cover three quarters of the U.S. population.
Given that opponents of the merger do not want to see the U.S. wireless market go from four national carriers to three, Claure and Combes testimony may still help the case for the merger. In effect, both executives are implying that Sprint will cease being a national carrier and join the ranks of a regional carrier should the merger fail.
In addition, as part of the deal, T-Mobile and Sprint would sell off wireless assets to Dish Network to help it become a new fourth carrier. Dish’s CEO Charlie Ergen testified that his company would be ready to compete with the other carriers “from day one,” once the deal is finalized and it acquires the assets involved.
Ultimately, the court may decide that the market would be better served by Dish Network acting as the fourth carrier, rather than a crippled Sprint.