Technology

T-Mobile CEO John Legere met employees at Sprint campus weeks after negative report

Meet T-Mobile’s popular and profane CEO John Legere

Four years ago, when Sprint tried to buy T-Mobile, analysts expected T-Mobile’s CEO John Legere would run the merged companies. Now that T-Mobile’s buying Sprint, Legere’s back on Sprinters' horizon.
Up Next
Four years ago, when Sprint tried to buy T-Mobile, analysts expected T-Mobile’s CEO John Legere would run the merged companies. Now that T-Mobile’s buying Sprint, Legere’s back on Sprinters' horizon.

Sprint’s planned merger took center stage at the company’s Overland Park headquarters campus Friday as visiting T-Mobile executives took part in a 90-minute town hall event.

T-Mobile CEO John Legere addressed Sprint employees, as did T-Mobile President Mike Sievert, during the midday session that was webcast throughout Sprint’s offices. The men will hold the same titles after Sprint merges with T-Mobile, assuming federal officials approve their $26 billion deal.

Sprint spokesman Dave Tovar said T-Mobile’s network chief Neville Ray, finance chief Braxton Carter, newly name integration chief Sunit Patel and others attended but did not address Sprint employees. He said the meeting allowed the T-Mobile team to introduce itself and to begin talking about integrating Sprint into Bellevue, Wash.-based T-Mobile once regulators approve a merger.

“It was something John (Legere) and Mike (Sievert) really wanted to do,” Tovar said.

He said Legere complimented Sprint employees for their talents and compared the Overland Park campus to the second headquarters Amazon wants to build. T-Mobile, whose Seattle-area headquarters are “bursting at their seams,” doesn’t have to go through that process, Tovar said.

It was clear that Legere also mingled with Sprint employees, some of whom posted selfies with their potential new boss on Twitter.

At one point, former Sprint CEO Marcelo Claure, who is now executive chairman, current Sprint CEO Michel Combes, Legere and Sievert took the stage together. Employees were encouraged to ask questions by text, though instructions said the text should include the employee’s name and location.

Afterward, everyone headed outside for a celebration that included food trucks, music and games.

The event came two weeks after Sprint executives presented a sickly portrait of their company’s prospects to FCC officials as part of the regulatory review process.

Sprint’s executives see “no obvious path to solve key business challenges,” according to slides associated with the Sept. 21 presentation that was made public by the FCC last week. The 23-slide presentation itemized problems Sprint has been unable to overcome despite shifting its strategies to solve them.

“Sprint has not been able to turn the corner with respect to its core business challenges,” the first point on the first slide in the presentation said.

The slide show included an update on Sprint’s budget cutting efforts.

It said the company has eliminated about $10 billion in annual expenses. Although that has made the company profitable recently, Sprint executives told the FCC officials last month that this “cost cutting is nearing its limit and becoming more difficult.”

The dark declarations to regulators stand in contrast to Sprint’s confident messages to others.

To current and potential customers, Sprint touts its “network built for unlimited” data and its “industry leading” unlimited data plans. For shareholders, the Overland Park wireless company trumpeted its “strong financials and positive subscriber growth” in its most recent update.

Sprint executives’ presentation to the FCC was not the company’s first such report in an effort to promote the proposed merger with T-Mobile.

“Sprint has lost share despite its aggressive competitive actions and price moves,” said a Public Interest Statement about the merger the partners submitted to the FCC in June.

The September and June accounts of Sprint’s situation agree that its problems are serious and that efforts have failed to fix them.

NEW Sprint-coverage.jpg

June’s filing said Sprint’s LTE network covered “far less geography” and potential customers than the data networks of its rivals Verizon, AT&T and T-Mobile. The September slide show depicted this by laying Sprint’s limited LTE yellow coverage map over the far more extensive red, blue and magenta LTE maps of its larger rivals.

Each depiction of Sprint’s situation highlighted consumers’ negative perceptions of Sprint’s network, but each also acknowledged Sprint’s inability to invest enough to catch up to its rival’s networks.

“Even with accelerated investment, Sprint is still unable to ‘catch up’ from previous underinvestment, much less build a network that achieves parity with Verizon and AT&T (based on network capital expenditures per subscriber),” the document from June said.

Each also said Sprint is more or less caught in a vicious circle, a series of problems that feed on each other.

September’s picture show drew a circle that explained those forces.

Sprint-problems.jpg

At the top stands “network shortcomings and perceptions” that leads to “high (customer) churn and inability to attract subs(cribers),” that has led Sprint to spend heavily on “promotional activity required to fight subscriber reductions,” the slide shows.

Those cut-rate prices and costly promotions lead to “poor cash flow and high, sub-scale cost structure” that in turn means Sprint has a “reduced ability/incentive to invest in network and distribution” that contributes to the “network shortcomings and perceptions” that started the circle.

Related stories from Kansas City Star

  Comments