Timeline: Sprint’s merger with T-Mobile
Combes has landed on his feet in tight spots before. The French businessman got his previous job despite criticism at the time from France’s economy minister Emmanuel Macron, who is now its president.
And, if the T-Mobile merger leaves Combes without a job, he would be in line to collect his third severance deal in a row. He collected severance packages after a bit more than two years each as CEO of Alcatel-Lucent and then as CEO of Altice NV.
"It's good to be Michel," Recon Analytics analyst Roger Entner said of Combes.
Meanwhile, Combes is tasked with what Entner called a caretaker role, leading a company in the weird position of hoping to meld into its larger rival.
“Realistically, he’s baby-sitting the thing until the deal gets done,” said Jeffrey Wlodarczak, CEO of Pivotal Research Group.
Combes called that perception untrue.
Sprint's detailed plans for this year double its spending on its network and other investments, accelerate its roll-out of new stores and lay the footings for 5G technologies due to launch in about 12 months, among other things.
Combes cited his earlier roles at other telecom companies — 10 years at Orange/France Telecom and four years at Vodafone Europe.
"I'm a long-term guy in the companies I have managed," he said.
Sprint could turn into that kind of opportunity for Combes.
Federal regulators may well nix the merger and leave Sprint on its own, with Combes at the helm and facing three larger, better-funded rivals in T-Mobile, Verizon and AT&T.
Third time a charm?
Combes officially replaced Marcelo Claure as Sprint CEO on Thursday, though the succession was announced along with the merger deal in early May.
Sprint had hired Combes in January to succeed Tarek Robbiati as chief financial officer. Combes' promotion to CEO frees Claure, who has led Sprint since August 2014, to become executive chairman and spend most of his time pressing Washington for approval of the T-Mobile merger.
This is Combes’ third CEO job in five years.
He’d taken the top job at France-based cellular equipment maker Alcatel-Lucent in April 2013. Those were troubled times for the company, and Combes ended up negotiating its sale to rival Nokia.
Just before the sale went through, Combes left in September 2015. Reports that his exit payout was worth about 14 million euros drew protests from the public and government.
Macron had complained about Combes leaving before the deal was complete, saying that it was "not normal that a big business leader is the first to jump ship," according to a report by the Financial Times of London. The company, with Combes’ cooperation, set a new payout deal capped at 7.9 million euros. The euro was worth more than a dollar and remains so now.
On Thursday, Combes said he'd taken over a "nearly bankrupt" Alcatel-Lucent and made a lot of money for its shareholders by rescuing the company and merging it with Nokia.
Combes landed quickly at Netherlands-based Altice NV as chief operating officer of the cable operator. He became its CEO in June 2016. Altice had shipped its then-CEO Dexter Goie to America, where it had just bought Cablevision and was combining it with Suddenlink to form Altice USA.
Last fall, Combes resigned just after the parent company had reported bad financial results and its stock fell more than 30 percent in a week. Customer losses in France were a thorn in the side of shareholders.
Combes said his exit reflected the company's decision to break off its U.S. business as a separate company, making his job unnecessary.
Wlodarczak said Combes had been a scapegoat as far as the financial results and couldn’t be held responsible for Altice’s problems in France.
“France is maybe the most competitive market in the world. It is an atrocious market,” he said.
In any case, Altice paid Combes a 6 million-euro severance deal. Company documents said the amount exceeded "the severance fee he was entitled to in his employment agreement" but still necessary.
The amounts Combes received may have stirred tensions in France, but they paled in comparison to $100 million exit packages some U.S.-based CEOs have received.
At Sprint, Combes is covered by the company’s change-in-control severance plan, which could see him repeat the exit package payoff again.
“He knew exactly what he was walking into and negotiated his deal accordingly,” Entner said.
A T-Mobile life
Combes already knows that he won’t be CEO of the beefed-up T-Mobile after the merger. Or even its president.
Those jobs are promised to T-Mobile's CEO John Legere and operating chief Mike Sievert. T-Mobile will want Sprint executives in the merged company's ranks. It is unclear where a newcomer like Combes fits in.
"Most likely, he's probably going to move on again," Wlodarczak said.
Combes said the question about his role after the merger is premature. His goal is to see his Sprint colleagues end up in the right jobs after the merger, he said, adding that the combined business will need them.
Industry analyst Berge Ayvazian sees another possible path for Combes. T-Mobile’s parent company, Deutsche Telekom, has wireless operations throughout Europe.
“Mr. Combes clould end up back in Europe,” Ayvazian said.
The other alternative is that federal officials block the deal. This would leave Combes as CEO of the No. 4 wireless carrier in a tough U.S. wireless industry.
"If the deal doesn’t go through, the rebuilding of Sprint will test his mettle," said industry analyst William Ho of 556 Ventures LLC.
He said Combes' background in wireless, equipment manufacture and cable operations will help in the increasingly converging world of telecommunciations.