Contact: Scott Denne
T-Mobile’s marketing smarts propelled the company to the number three spot among US wireless carriers. Now the company is leaning on those same skills to get its $26.5bn acquisition of Sprint through regulatory approvals. Its pitch for the deal, which has an enterprise value of $59bn, is laced with potential benefits to the US, particularly benefits that align with President Donald Trump’s rhetoric.
The FCC already threw cold water on the pairing once before under a previous administration, so getting this one past the government was always going to be a challenge regardless of who occupied the White House. While highlighting the broader benefits of a large transaction isn’t new, T-Mobile’s push is remarkable in its breadth.
In addition to the usual talk about the negligible (or positive) impact on competition and consumer prices, T-Mobile and Sprint are highlighting the potential for the combo to create jobs (particularly jobs in rural areas) and beat China and other countries in having the first nationwide 5G wireless network – it even set up a website to promote the deal at AllFor5G.com.
The press release announcing the acquisition mentions ‘job growth’ or a similar idea 12 times. Compare that with the release announcing the previous $50bn-plus US telecom pairing – Charter Communications’ 2015 takeover of Time Warner Cable – which made just one mention of jobs. In fact, according to 451 Research’s M&A KnowledgeBase, only four other $1bn-plus transactions among US publicly traded companies mentioned the potential for job growth in their press releases. And none did so more than twice.
T-Mobile has been massively successful in catering to its customers with its ‘Uncarrier’ strategy. According to a February survey by 451 Research’s VoCUL, T-Mobile’s percentage of satisfied customers (49%) has lurched beyond its competition. Whether its purchase of Sprint goes through or not may end up turning on the legal merits, not its marketing chops. Yet it clearly feels compelled to make a political case for the match – announced a day before closing arguments in a specious antitrust action against AT&T’s acquisition of Time Warner – to an administration that’s been unusually active in stopping deals.
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