Sprint Exec Marcelo Claure Still Has 'Faith' in T-Mobile Merger After Hearing

February 13, 2019

By Chloe Aiello

Hours after tough questioning before a House committee Wednesday, Sprint Executive Chairman Marcelo Claure told Cheddar he still has faith his proposed merger with T-Mobile will win FCC and Justice Department approval.

"We have a lot of faith in those two institutions ー the [Federal Communications Commission] and [Department of Justice] ー to basically approve based on the merits of the merger," Claure told Cheddar's J.D. Durkin.

Claure and T-Mobile CEO John Legere have long pitched the mega-merger of their companies, the third and fourth largest U.S. telecom carriers, as a strategic play at 5G ー or the next generation of internet. And Claure said he is confident lawmakers won't jeopardize the U.S. race to 5G against China by scuttling the deal.

"You've seen the benefits of 4G. When the U.S. is leading 4G, we have the world's most valuable companies ー all tech in the U.S.," Claure said. "There's a threat that all those entrepreneurs, all those innovations, all those disruptors will start heading to China. That's something that no lawmaker in the U.S. will allow to happen."

The companies have also promised the merger would lead to job creation, expanded rural coverage, lower prices and a $40 billion investment in its new network. But some members of the House Energy and Commerce Committee expressed skepticism during the hearing on Wednesday.

According to the Associated Press, the lawmakers expressing doubts included Rep. Frank Pallone (D-N.J.) who said he was concerned the merger would lead to higher prices for "consumers who can least afford to pay more."

Rep. Darren Soto (D-Fla.), however, told Cheddar he was encouraged that the executives said they'd be willing to include as conditions of the merger that rates would remain the same for three years following the deal and that it would not result in sweeping job losses.

"We are concerned about making sure that we are not seeing huge firings ー these are constituents of mine and across the nation. But we also need to make sure we are competitive and forging forward on a 5G network," Soto said.

On the eve of the hearing, a group of eight U.S. Democratic Senators, including rumored or confirmed presidential candidates Amy Klobuchar (D-Minn.), Elizabeth Warren (D-Mass.), and Cory Booker (D-N.J.), plus independent Sen. Bernie Sanders (I-Vt.), all signed a letter urging the Federal Communications Commission and DOJ to stop the merger due to antitrust concerns, Reuters reported.

"I guess that's part of American politics. There's going to be some who are in favor, and some who are against," Claure said.

FULL TRANSCRIPT

Speaker 1: What happened today was largely

Speaker 1: along the lines of what I expected.

Speaker 1: You had the executive chairman of Sprint,

Speaker 1: Marcelo Claure and, of course,

Speaker 1: the very outspoken, uh,

Speaker 1: CEO of T-Mobile, Mr. John Legere,

Speaker 1: facing questions from Republican lawmakers,

Speaker 1: about their proposal to merge.

Speaker 1: What would effectively be the number

Speaker 1: three and number four,

Speaker 1: wide, nation-wide, uh, cell phone carriers.

Speaker 1: And so, there's a lot of concerns about

Speaker 1: cut-, siphoning off competition,

Speaker 1: raising prices, as always happens in

Speaker 1: these conversations in the merger and acquisition space.

Speaker 1: So, they addressed questions like

Speaker 1: this and a lot of Republican lawmakers,

Speaker 1: specifically, put an emphasis on

Speaker 1: rural American broadband access.

Speaker 1: Uh, I got to talk with a handful of

Speaker 1: lawmakers throughout the day and kind of get their gauge,

Speaker 1: check their pulse, if it were.

Speaker 1: As to how these issues were going.

Speaker 1: Uh, Congressman Steve Calise, uh Scalice,

Speaker 1: excuse me, Republican from Louisia- Louisiana,

Speaker 1: told me there was, "absolutely," he says,

Speaker 1: "a path forward for this merger to happen."

Speaker 1: He feels well satiated,

Speaker 1: based on the response that he heard from the two,

Speaker 1: uh, telecom giants earlier today.

Speaker 1: And keep in mind though, Senate Democrats yesterday,

Speaker 1: on a backdrop of controversy,

Speaker 1: sending an open letter to Ajit Pai, atop the FCC,

Speaker 1: urging government regulators here,

Speaker 1: Nora and Brad, to block this merger.

Speaker 1: Senate Democrats [LAUGHTER] really do

Speaker 1: not want to see T-Mobile and

Speaker 1: Sprint combined to form

Speaker 1: the new T-Mobile because of a lot of the,

Speaker 1: uh, the increased concerns they have.

Speaker 1: That this would limit competition,

Speaker 1: raise prices for average Americans.

Speaker 1: Immediately after the hearing, Marcelo Claure, uh,

Speaker 1: the former CEO of Sprint and now its executive chairman.

Speaker 1: Uh, he left the Congressional hearing,

Speaker 1: he was bolting to his car.

Speaker 1: I chased after him and we had what

Speaker 1: ended up being a two minute conversation

Speaker 1: and foremost I asked him directly

Speaker 1: to respond to those Senate Democrats.

Speaker 1: What do you tell lawmakers who

Speaker 1: do not want to see this merger move forward.

Speaker 1: Here's what Claure told me here this afternoon.

Speaker 2: That's part of American politics, right.

Speaker 2: There's gonna be some who are in

Speaker 2: favor of some who are against

Speaker 2: and that's why we have the FCC and DOJ.

Speaker 2: Who are actually the parties in charge of

Speaker 2: reviewing and making the final decision.

Speaker 2: So, we have a lot of faith in,

Speaker 2: uh, those two institutions,

Speaker 2: the FCC and DOJ to basically,

Speaker 2: approve the marriage based on the merits of

Speaker 2: the merger which we believe are incredible.

Speaker 1: Uh, now, Marcelo Claure going on to tell me that he has

Speaker 1: very specific concerns about one issue

Speaker 1: that was not really talked a whole lot today,

Speaker 1: uh, with members of the House

Speaker 1: Energy and Commerce Committee, Nora and Brad.

Speaker 1: And that is concerns over China.

Speaker 1: Marcelo Claure told me in no uncertain terms, "Look,

Speaker 1: if regulators block this merger from going through.

Speaker 1: If the government, the DOJ,

Speaker 1: and the FCC choose not to allow T-Mobile and,

Speaker 1: uh, Sprint to come together.

Speaker 1: The United States is going to lose,"

Speaker 1: he says the battle to reach

Speaker 1: 5G technology and we

Speaker 1: are going to lose that battle to China.

Speaker 1: Marcelo Claure telling me,

Speaker 1: no lawmaker, Republican or Democrat,

Speaker 1: wants to see that future.

Speaker 1: One thing that surprised me though,

Speaker 1: from the hearing today not a single question from

Speaker 1: a Democrat on the panel to John Legere,

Speaker 1: about all of these reports of

Speaker 1: the stunningly high number of

Speaker 1: T-Mobile executives that have stayed

Speaker 1: in President Trump's own Trump International Hotel

Speaker 1: here in D.C. since

Speaker 1: the announcement of this merger last year.

Speaker 1: It's been a big point of controversy.

Speaker 1: The Washington Post even reporting that

Speaker 1: Mr. Legere himself has been seen at

Speaker 1: the Trump Hotel on no fewer

Speaker 1: than four different occasions.

Speaker 1: I was tweeting quite a bit about that last night.

Speaker 1: I was also tweeting about the fact that John Legere and

Speaker 1: Donald Trump have a very contentious history

Speaker 1: when it comes to Twitter spats.

Speaker 1: Back in 2015, the two of them kind of exchanging

Speaker 1: blows on Twitter and John Legere of T-Mobile,

Speaker 1: just mysteriously, so happens,

Speaker 1: to have deleted those tweets.

Speaker 1: Where did his criticisms of Donald Trump go?

Speaker 1: I also tweeted about those

Speaker 1: last night and when I met up with Mr. La Jara,

Speaker 1: uh, Mr. Legere, excuse me, here this morning.

Speaker 1: He called my tweets snarky and he also told me,

Speaker 1: "I almost blocked you on Twitter."

Speaker 1: So, the T-Mobile CEO was

Speaker 1: not thrilled with my reporting last night.

Speaker 1: Uh, but Marcelo Claure of Sprint though,

Speaker 1: giving us a few good minutes of sound,

Speaker 1: on what was a pretty eventful day.

Speaker 1: Remains to be seen where we're going to go.

Speaker 1: A few lawmakers told me this is not going to be

Speaker 1: the last congressional hearing

Speaker 1: featuring T-Mobile and Sprint.

Speaker 1: And that was a bit of news that I was told earlier today.

Speaker 1: I was told to expect one,

Speaker 1: perhaps two more hearings as, of course,

Speaker 1: government regulators at the FCC and the DOJ continue to

Speaker 1: consider what would be

Speaker 1: a pretty blockbuster merger

Speaker 1: if this were to go through guys.