Sprint's Hesse: DOJ Lawsuit Against AT&T, T-Mobile Won't Prevent Consolidation
Sprint Nextel (NYS: S) CEO Dan Hesse said that the Department of Justice's lawsuit to block AT&T's (NYS: T) proposed $39 billion acquisition of T-Mobile USA -- which Sprint has joined -- won't necessarily prevent future industry consolidation.
Speaking at the Goldman Sachs Communacopia Conference, Hesse said any potential T-Mobile buyer will need to demonstrate that the benefits of removing T-Mobile from the market will outweigh the downsides. And while Hesse said he was not indicating that Sprint would pursue a merger with T-Mobile should the deal fall through, he said, "you could make a very, very strong argument" that combining two value wireless players would give the combined company the scale to compete better with AT&T and Verizon (NYS: VZ) Wireless.
The Sprint chief said he would not comment on the 4G network strategies the company plans to discuss at an Oct. 7 investor conference in New York, but did set the stage for what the company might talk about. Hesse said Sprint might lay out a concrete technical plan for how to do network hosting arrangements via its Network Vision architecture, which is centered around new, multi-mode base stations that can support LTE. He also said Sprint will likely discuss whether it will provide additional financial assistance to Clearwire (NAS: CLWR) , which sells mobile WiMAX service to Sprint and in which Sprint holds a 54 percent stake. Clearwire has said it can deploy a TD-LTE network overlay if it can secure an additional $600 million in financing.
And Hesse obliquely touched on reports that Sprint will launch Apple's (NAS: AAPL) iPhone 5 next month. Without confirming anything, Hesse said Sprint's financial guidance might have to be updated if is fourth-quarter handset lineup changed. "Theoretically, if we were to secure such a device, we may have to adjust guidance accordingly for that," he said.
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