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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  • anon

    Sprint never tried to purchase T-Mobile. wtf?

    • http://www.anthonydomanico.com Anthony Domanico

      lol…how’s life under the rock?

      • txbluesman

        no doubt! LOL!

  • spazby

    Is hesse on his way out?

  • Kizipotamus

    Sprint never needed any of those plans to build their LTE network. Lightsquared was *in addition* to what they can do. They can, and will build their LTE network by themselves, just as was always planned. And why would they have ever bought T-Mobile? It’s a GSM network, and completely incompatible with their own.

    • http://www.anthonydomanico.com Anthony Domanico

      To build a full LTE network, they do. If AT&T needs T-Mobile or spectrum of some kind to fully build out an LTE network, you can bet your ass Sprint does as well.

      • Kizipotamus

        They said that their LTE network will cover everywhere that currently has 3G. And that’s without LightSquared or anyone else.

  • Adam

    This is embarrassing Hesse and Sprint has a whole. Why would the CEO be pushing for a deal that it didn’t think the board would approve? It shouldn’t have even got to a vote.

  • CTown

    “…Sprint’s other network partner Clearwire is having FANATICAL troubles that put the company’s ability to provide the kind of coverage Sprint needs into serious doubt…”

    Are you implying that Clearwire is run by the insane!

    • http://www.anthonydomanico.com Anthony Domanico

      yes, yes i am.

      actually, it was a typo…one that my stupid macbook air autocorrected. ha

  • Joel

    Hm…mixed feelings – On one end I (as a MetroPCS customer) I would have loved the merger because Metro could really use the help as far as network and service goes.
    However, I appreciate Metro and what its been able to accomplish – no contract….5th largest….and getting its first dual core phone on 3/1 (hopefully).

    hmm…but what does “didnt feel right” mean? and now that Sprint has backed down…are Verizon and the other 2 gonna raise their eyebrows now?

  • Max.Steel

    Already been going around the blogosphere for some time now. Way to stay on top of the news…

  • Taylor

    Sprint without Dan Hesse is a no-go for me.

  • Shawn Clark

    That sounded like it was gonna be a good merger…I hope they don’t let the CEO go.

  • yankeesusa

    Dan hesse has done alot for sprint. Even with taking away some perks he has still kept most Sprint customers happy and is trying hard to fix the data issues. If they let him go now it would really hurt them. I hope that they just didn’t like the terms of the deal.

  • Nathan D.

    Wow that sucks for the CEO but sprint can still be in the game but how they are going to do that is still something that needs to be thought out a bit.

  • imkrmtdafrg

    For some reason people seem to forget that we have the nextel network, and all of those towers and spectrum. Thats what we are using to build the network!