New T-Mobile CEO Mike Sievert on completed Sprint merger: ‘We have the potential to become number one’
The confetti cannons will stay, so says new T-Mobile CEO Mike Sievert on Wednesday, his first day as head of the newly gigantic wireless carrier.
A signature event accoutrement of his immediate predecessor, John Legere, the cannons have been the perfect metaphor for T-Mobile’s successful assault on the wireless industry over the past seven years. Now that T-Mobile has finally completed its $26 billion merger with Sprint, the assault will continue with even greater resources under Sievert.
And he’s talking a big game right out of the gate. “For me as a new leader, I intend to focus the energies of this incredible team—that’s already customer experience–obsessed—behind the goal of becoming America’s most-loved brand in the history of our space,” Sievert tells Fortune. “We have the potential to become No. 1, not just in market share but in customers’ hearts.”
Even with Sprint under its umbrella, the new T-Mobile trails rivals Verizon and AT&T in a few key metrics. Verizon had revenue of $132 billion last year and net income of almost $20 billion, while AT&T brought in $182 billion of revenue and $15 billion of profit. By contrast, T-Mobile and Sprint combined for almost $78 billion of revenue in calendar year 2019 and a profit of just $776 million. (T-Mobile made $3.5 billion, while Sprint lost $2.7 billion.)
Sievert, who has never gotten in a Twitter feud with President Donald Trump or attacked rivals with a string of expletives, as Legere has, will bring a different emphasis to T-Mobile’s corner office. Before joining Legere’s team in 2012 as chief marketing officer, Sievert was a senior marketing executive at AT&T Wireless and Microsoft. He became T-Mobile’s chief operating officer in 2015 and its president two years ago.
Expect a little more of a suburban dad vibe from Sievert, and less of the leather jackets and long hair that Legere brought to the role. “Every leader has to do it their own authentic way, and one of the things that has always been so effective for John is that he’s true to himself,” Sievert says. “You’ll see me emulate that by being true to myself.”
Still, with thousands of Sprint employees nervous about their new corporate owner, Sievert said he plans to follow Legere’s strategy of making frequent visits to offices, stores, and call centers around the country.
Of course, the novel coronavirus outbreak didn’t figure into T-Mobile’s extensive and lengthy planning process for integrating Sprint, so Sievert and his team are making adjustments on the fly. About 75% of the two carriers’ combined retail store network is currently closed, and many employees have been required to work from home. The network build-out has also slowed, if slightly. (Cell tower crews work outdoors in small groups, and can safely distance themselves as they continue expanding the network, T-Mobile’s president of technology Neville Ray says.)
“We’ve been planning this day for years, and we never imagined bringing it about under circumstances like this,” Sievert says.
T-Mobile has already said that the pandemic will have a material impact on its results, if short-lived. When the outbreak ends, the “new normal” may see many consumers opting to be more frugal, which could help T-Mobile compete against its more expensive rivals, Sievert notes.
“It might be a normal where more people have tighter budgets and tougher economic circumstances,” Sievert says. “If that’s the case, T-Mobile will be very, very well positioned to serve the public under circumstances like that.”
Currently, with tens of millions of Americans stuck at home, traffic on T-Mobile’s existing network has increased 8% to 10% overall, with voice call minutes increasing 25% and video messaging up 75%, Ray says. “The network’s doing very well,” he adds. Even before the Sprint merger closed, the Federal Communications Commission allowed T-Mobile to temporarily borrow some unused spectrum owned by others for the duration of the crisis.
As Ray and his teams start shifting Sprint’s spectrum over to T-Mobile’s network, customers of both carriers should notice better coverage and faster speeds. Sprint and T-Mobile have already promised to bring superfast 5G service to 97% of the U.S. population within three years and to 99% after six years. “We stand behind those promises 1,000%,” Ray says. Some of T-Mobile’s earliest 5G deployments aren’t much faster than 4G, but its new network will be eight times as fast or more, Ray says.
That will ultimately enable T-Mobile to debut a nationwide home Internet service over 5G to compete with the big cable and telecommunications companies that currently dominate that market.
“We see the potential to serve millions of customers and bring real competition for the first time to a marketplace that’s never really had serious competition,” Sievert says. “We know what it means to compete; we’re used to it. Some of these other guys, not so much.”
That sounds a lot like what his predecessor used to say about his wireless rivals—only without the f-bombs.
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