Sprint CEO Hesse Out, T-Mobile Merger Off
Sprint this morning confirmed reports that CEO Dan Hesse is leaving the company. Brightstar CEO Marcelo Claure will take over as President and CEO at Sprint, effective Aug. 11.
Claure founded Brightstar, a wireless distribution company, in 1997 and earlier this year sold a majority stake to SoftBank for $1.26 billion. After the sale he joined the board at Sprint, also owned by SoftBank.
“In the short-term, we will focus on becoming extremely cost efficient and competing aggressively in the marketplace. While consolidating makes sense in the long-term, for now, we will focus on growing and repositioning Sprint,” Claure said in a statement.
“While we continue to believe industry consolidation will enhance competitiveness and benefit customers, our focus moving forward will be on making Sprint the most successful carrier,” Sprint Chairman Masayoshi Son said in a statement.
Both Claure’s and Son’s statements seemingly confirm reports that Sprint is tabling its bid for a controlling interest in T-Mobile. Reuters cited sources who said Sprint and SoftBank don’t think skeptical U.S. regulators can be persuaded to sign off on the third and fourth largest U.S. providers merging.
Although unconfirmed, FCC Chairman Tom Wheeler commented on the reports.
“Four national wireless providers is good for American consumers. Sprint now has an opportunity to focus their efforts on robust competition,” Wheeler said in a statement.
With Sprint’s bid for T-Mobile out of the picture, French carrier Iliad’s $15 billion pursuit of majority stake in T-Mobile suddenly gains new leverage. T-Mobile had reportedly refused to open its books to Iliad because it felt the offer wasn’t attractive enough. Iliad has reportedly been reaching out to TV providers like Dish, Cox and Charter about a potential joint-bid for T-Mobile.
Meanwhile Sprint enters yet another transition, with news of the CEO switch and T-Mobile offer being put on ice causing Sprint’s stock to nosedive.
Hesse, who stepped in as CEO in December 2007, saw Sprint through many formative years. He led the rip and replace initiative to update Sprint’s network, oversaw Sprint’s acquisition of Clearwire and its massive amounts of spectrum, and helped finalize SoftBank’s $21.6 billion acquisition of Sprint.