September 19, 2012

Legere and T-Mobile USA: An Interesting Combo


The selection of former Global Crossing CEO John Legere to head up T-Mobile USA is a fascinating choice. Legere, a 32 year veteran of the telecommunications and technology industry, will assume the helm of T-Mobile on September 22. What he does in the next 12 months will bear a close watch.

Legere takes over a business unit that Deutsche Telekom (DT) wanted to unload to AT&T. U.S. regulators nixed a T-Mobile/AT&T merger, leaving DT with a still-declining business unit but one with a $3 billion cash injection plus $1 billion in new spectrum due to breakup conditions if the deal didn't go through. 


Image via www.tmobile.com

T-Mobile USA lost 1.65 million customers last year, with the last two quarters of 2012 not looking much better with a drop of 205,000 million in the second quarter.   The fourth-place U.S. wireless carrier is betting on a $4 billion LTE rollout to keep and attract subscribers, with network service to start in 2013.

Enter Legere, the former CEO of Global Crossing. With stints at AT&T and New England Telephone on his resume, Legere certainly knows the telecom business on the wholesale and enterprise sectors.  He's also was a senior VP at Dell Computer, so he has depth in the consumer and retail fields as well.

Global Crossing's story also lends itself well some of the other reason why Legere was brought into T-Mobile USA. Legere became head of Global Crossing shortly before the dot.com bubble turned into dot.bomb, with the company looking for a buyer and going through a Chapter 11 bankruptcy. After cleaning up the books, Global Crossing ultimately ended up purchased by Level 3.

Map Legere's resume to T-Mobile USA and you have experience in mergers, deployment of new technology, and running a company with issues (financial, organizational) and fixing them. Add in his international experience when he arrived from Asia Global Crossing to Global Crossing, and Legere should have a solid working relationship with the home office in Germany.

Perhaps the only "hole" in his resume is that his more recent career has been focused on the telecommunications wholesale and larger enterprise sectors with an emphasis on multi-national opportunities. T-Mobile USA has to stem customer churn, get its LTE build accomplished without hiccups, and maybe engineer a merger with another U.S. cellular carrier to get it out of DT's portfolio. While a Sprint/T-Mobile USA combination seems unlikely given the current regulatory mood, it is possible T-Mobile USA could pick up a smaller carrier for more licensed spectrum -- the most precious asset of the wireless world -- and market share. Clearwire, Leap Wireless and MetroPCS all might be potential merger candidates down the road.




Edited by Brooke Neuman



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