March 10, 2014 / 7:40 PM / in 5 years

T-Mobile US CFO says industry consolidation is inevitable

NEW YORK (Reuters) - T-Mobile US expects to engage in some form of cellular industry consolidation, the CFO of the United States’ fourth-largest carrier said on Monday, boosting investor expectations that a merger with Sprint Corp could be on the horizon.

A T-Mobile store sign is seen in Broomfield, Colorado February 25, 2014. REUTERS/Rick Wilking

“It is not a question of if, it is a question of when,” Braxton Carter said about the company’s prospects for consolidation at a media, internet and telecom conference.

“To take a third-scale national player that has the scale benefits with the right business model could be very competitively enhancing in the U.S.,” he said.

The comments come on the eve of an address by the president of SoftBank Corp, which owns 80 percent of Sprint, to investors and technology policymakers in Washington on Tuesday.

Hopes for a merger between Sprint and T-Mobile, the No.3 and No.4 U.S. mobile service providers, faded last month when reports surfaced that the U.S. Department of Justice and Federal Communications Commission would look skeptically on a merger.

U.S. regulators previously rejected AT&T Inc’s $39 billion takeover bid for T-Mobile US in 2011. They have since argued that T-Mobile US has grown stronger, proving that the market can sustain four companies.

Carter said that if the government wants to preserve competition it must prevent the country’s two largest carriers, AT&T and Verizon, from dominating spectrum auctions.

“The government can’t have their cake and eat it too. If they think there really needs to be four players in this market on a nationwide basis, they are going to have to put some structural protections to ensure an adequate distribution of spectrum,” he said.

Deutsche Telekom, T-mobile’s majority owner, said last week that it would be open to a potential consolidation in the U.S. mobile market but that it was in no hurry.

“At the moment we have no difficulties to run T-Mobile US on a stand-alone basis,” Deutsche Telekom’s Chief Executive Tim Hoettges told a news conference.

“If a consolidation in the U.S. mobile market will take place, we will enter that phase with an open mind,” he added.

Carter’s remarks also came despite a string of tweets last week by T-mobile’s outspoken CEO, John Legere, berating Sprint.

“Remember when people actually liked @sprint? Yeah, me either,” Legere tweeted.

Reporting By Marina Lopes; Editing by Nick Zieminski

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