Feb 25 AT 2:02 PM Anthony Domanico 17 Comments

Sprint was hours away from acquiring MetroPCS before Sprint’s Board rejected it


After their plans to take over T-Mobile USA were thwarted in the 11th hour by a $39 Billion bid from AT&T, Sprint was scratching its head as to what to do next. It announced a partnership with Lightsquared, though that deal is now doomed as Lightsquared has failed to gain FCC support of its next-generation mobile LTE network. Further, Sprint’s other network partner Clearwire is having financial troubles that put the company’s ability to provide the kind of coverage Sprint needs into serious doubt.

When it was announced that AT&T was not going to be allowed to acquire T-Mobile, rumors once again began to swirl about another possible takeover attempt. Yesterday, a takeover announcement came out of left field, with CNBC reporting that Sprint was a mere hours away from announcing an $8 Billion takeover of regional carrier MetroPCS when Sprint’s Board of Directors voted to reject the takeover, even after Sprint’s CEO Dan Hesse signed off on the arrangement.

Sprint and MetroPCS had apparently been negotiating the deal for quite some time, perhaps dating as far back as when Deutsche Telekom announced it was going with AT&T as T-Mobile’s suitor. While the MetroPCS deal would have presented Sprint the same issues it faced with a T-Mobile merger, namely, integration of MetroPCS’ AWS spectrum, the Board rejection of the takeover leaves us scratching our heads as to how Sprint will viably build out their LTE network.

Engadget is reporting that the board stated that the timing of the merger just “didn’t feel right,” which is hardly a sufficient enough explanation for us. Sprint has its work cut out for it as it hopes to build an LTE network to compete with juggernauts Verizon and AT&T, and with Plans A (LightSquared), B (Clearwire), C (T-Mobile), and D (MetroPCS) largely off the table, it appears Sprint is going to need to get creative if it is to remain competitive.

In an interesting piece on PandoDaily, Trevor Gilbert speculates that a board rejection of this magnitude could indicate that Sprint CEO Dan Hesse is on the way out. Generally, the Board of Directors appoints a CEO who they trust to make decisions about key business developments, who likely would have kept the Board updated on the status of the potential merger at their quarterly board meetings. Knowing the details as they progressed, you would assume the Board would have spoken up if they weren’t on board with the merger. Doing so loudly at the eleventh hour suggests that they either don’t like the way the deal ended up (the terms, etc.), or they don’t trust Dan Hesse to lead the way.

We’ll learn more in coming weeks. In the meantime, what do you guys think of all this? Personally, I love Dan Hesse and think it could be a mistake to let him go, though admittedly I don’t know what goes on behind closed doors.

Via: Engadget

Source: The Verge

Anthony loves all things technology, from hardware to apps and games. You can connect with him via Google+ or Twitter by clicking one of the fancy doo-dads above.

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