Sprint CFO Tarek Robbiati this week addressed the perennial question of a merger with T-Mobile US during the company’s earnings call.
Asked if he thought the outlook for a “combination or permutation” had changed during the last two years, Robbiati responded by saying that while Sprint’s primary focus is organic growth, the company is monitoring the political climate closely. Robiatti said a merger or similar transaction could be synergistic for the carrier and its partner.
“We are, first and foremost, focused on maximizing value for our shareholders on a stand-alone basis by executing our transformation plan,” Robbiati said. “There is external speculation on potential strategic opportunities, and there could be potential synergies with different types of transactions and any other models that are currently being discussed.
“The common thread is that Sprint has great assets including the best spectrum portfolio in the U.S.,” Robbiati added. “And to maximize the synergies in any theoretical or strategic opportunity, these assets will be the key component for 5G and for delivering content moving forward. From a policy perspective, it would seem to make sense that over the long term, further consolidation among the smaller players may be necessary to compete with the big two, but it’s early days and we will monitor that situation closely.”
T-Mobile US CEO John Legere has also recently said the market’s No. 3 carrier would consider a merger as a way to grow, and acknowledged that many people believe a combination of the two smaller nationwide carriers could make sense. When Sprint reported a $50 billion investment from Japanese parent SoftBank, T-Mobile US’ stock rallied.
SoftBank Chairman Masayoshi Son reportedly hoped to merge Sprint with T-Mobile US shortly after he invested in Sprint in 2013, but eventually realized the U.S. government wouldn’t approve a deal. Son already has a relationship with the new administration in Washington. President Donald Trump met with Masayoshi Son in New York late last year, and after the meeting Son announced the $50 billion additional investment in Sprint and that he would create 50,000 new jobs. Shortly thereafter, Sprint announced plans to bring 5,000 jobs “back to the United States.” Those jobs are expected to primarily support sales and customer care.