Sprint plans to wait until its finishes
upgrading its network before seriously considering merging with another
company, but it is not altogether dismissing the possibility of a near-term
deal, its top executive said.
Speaking at an investor conference Wednesday,
CEO Dan Hesse said the company’s primary focus through 2013 would be its $5
billion overhaul project, “then let’s talk about consolidation in 2014
when we have all this behind us.”
A merger sooner than that “is not
ideal” in part because of Sprint’s rock-bottom stock price, which has lost
about half its value since last summer, but it would consider a merger sooner
than that if the “synergies” were right, Hesse said at the annual
J.P. Morgan Global Technology, Media and Telecom Conference.
Hesse expressed confidence that the
government was open to further consolidation in the wireless industry even
after the FCC and Justice Department blocked AT&T from acquiring T-Mobile
USA.
Sprint was one of the most vocal
opponents to the transaction, claiming it would give AT&T and Verizon a veritable
“duopoly” hold on the market, but maintains that mergers and acquisitions could
be beneficial for other providers like itself.
“Washington would be receptive to
consolidation to provide more balance” to the dominant position of
AT&T and Verizon, Hesse said. “I honestly believe that both the DOJ
and FCC have an open mind with respect to additional consolidation and want to
see a competitive wireless industry.”
Sprint was said to have been close to a
merger agreement with MetroPCS in February, only to have its board of directors
nix the deal at the last minute.
Hesse’s comments came after rumors
circulated last week that AT&T had recently held merger negotiations with
Leap Wireless International. Also making the rounds in the rumor mill was a
report that Deutsche Telekom was considering merging T-Mobile with MetroPCS.
Mergers and acquisitions provide a quick
path to growth for wireless operators in the mature U.S. market, where
acquiring a new subscriber typically means luring it away from another
provider.
The number of active devices outpaced
the country’s population at the end of last year, and though many executives
have pointed to connected devices as a potential source of new customers, the
saturation of the customer base limits operators’ potential for organic growth.
