T-Mobile’s trash-talking CEO John Legere will be stepping down in April, a decision industry watchers say could harm the company’s controversial $26 billion merger with Sprint.
In a statement, T-Mobile said that Legere would be stepping down on May 1, 2020, replaced by current Chief Operating Officer Mike Sievert.
“I personally want to thank John for all he has done for me and for the T-Mobile brand, our customers, employees, partners, and investors,” Sievert said. “John is a one-of-a-kind, visionary leader who has redefined the role of CEO and demonstrated how to use it to create positive change for customers, employees, and investors alike.”
Early on, Legere was applauded for being a stark contrast to decades of personality-optional telecom executives. From telling CES attendees his competitors offerings were a “crock of shit,” to Christmas video cards mocking AT&T and Verizon as purveyors of “bullshit,” Legere’s brash demeanor was an entertaining shift for a typically dull sector.
Under Legere’s leadership, T-Mobile branded itself as a consumer-friendly “uncarrier” alternative to the bigger, more traditional players. And initially, the company’s efforts had a very clear and positive impact on the U.S. wireless sector, including the elimination of expensive roaming costs, long-term contracts and at least some of the sector’s sneaky fees.
But T-Mobile’s reputation as a consumer ally under Legere was always a bit skin deep.
Under Legere, T-Mobile has been a notorious union buster, creating illegal fake unions in the hopes that employees wouldn’t join a real one. The company also supported the repeal of net neutrality and broadband privacy rules, attacked groups like the EFF, and cozied up to the Trump administration to gain approval for its unpopular, competition eroding merger with Sprint.
That included hiring former Trump campaign manager Corey Lewandowski shortly after he’d mocked a kid with Down Syndrome on television, and ramping up T-Mobile executives’ patronage of Trump’s DC hotel, a violation of the Constitution’s emoluments clause.
Legere has also made a long list of dubious claims to justify the merger, in stark contrast to the parade of economists and consumer groups who note that 40 years of telecom history make it clear the deal will reduce competition, raise rates, and result in thousands of lost jobs.
Modern T-Mobile was born from the remnants of the DOJ’s decision to block AT&T from buying T-Mobile in 2011. The blocking of the deal forced AT&T to pay a $4 billion break up fee, money then used to propel T-Mobile to success.
Ironically, a company born out of government opposition to wireless consolidation is now pushing for one of the most controversial megadeals in industry history. The shift, driven largely by T-Mobile majority owner Deutsche Telekom, forced Legere into a role that’s in stark contrast to the brash, consumer-friendly persona he’d built since 2012.
Former FCC lawyer Gigi Sohn told Motherboard Legere may just be leaving while he’s on top. But she also said his absence undermines past promises that he’d help ensure the merged company continues to be disruptive post merger.
“Legere stepping down could have an impact if T-Mobile keeps making the argument that being a maverick is in T-Mobile’s DNA because of his leadership and that somehow the company will keep vigorously competing with lower prices and more innovative services even after it becomes as big as AT&T and Verizon,” she said. “I’ve never bought that argument, but it sure has less power if he’s leaving early next year.”
While the DOJ and FCC have already approved the merger, Matt Wood, a lawyer at consumer group Free Press, told Motherboard Legere’s absence would likely be highlighted by the bipartisan coalition of 13 state AGs currently suing to stop the deal.
“T-Mobile was never going to follow through on any of these little goodies it's promising to the federal government and now the state attorneys general, unless the company was already planning to and fully able to do those things without the merger,” he said.
“But the empty sales pitch is all the more hollow if the lead sale salesman Legere himself never planned to stick around and deliver on what he tried to sell to lawmakers, FCC commissioners, and antitrust enforcers,” he added.
All told, industry watchers say Legere deserves ample credit for turning T-Mobile into a disruptive force. Now the brash CEO may be heading for the exits before the company he helms starts behaving just like the competitors he spent the better part of the last decade making fun of.