T-Mobile USA – the fourth largest telecom carrier in the U.S. – recently appointed John Legere as Chief Executive Officer (CEO), effective this month.
John Legere will succeed the interim CEO Jim Alling, who will return back to his existing role of Chief Operating Officer (COO).
T-Mobile’s quest for CEO began from June onwards when the former CEO Philipp Humm resigned and became the CEO of Vodafone Group PLC'.s (VOD) Northern and Central European division.
John Legere is a former CEO of Global Crossing – a worldwide Internet services provider and has worked for 32 years in the telecommunications and technology sectors. 54-year old Legere had an excellent track record of converting Global Crossing into world's first integrated global IP-based network service provider. Prior to this, Mr. Legere held important positions at AT&T (T) and Dell Inc. (DELL).
At present, T-Mobile is facing huge pressure from its top three rivals, Verizon Communication Inc. (VZ), AT&T and Sprint Nextel Corp. (S) as the company lacks sufficient spectrum depth to fully deploy 4G LTE technology across its footprints. Moreover, lack of cash coupled with no iPhones in its smartphone portfolio has severely affected its subscriber growth.
Following T-Mobile’s failure to be acquired by AT&T, the company was forced to invest nearly $4 billion in a bid to upgrade its network (nearly 37,000 cell sites), which will aid T-Mobile USA to combat the prevailing stiff competition in the telecom sector.
Change in management, coupled with huge investment in its LTE technology will act as tailwinds for T-Mobile going forward. Moreover, swapping of spectrum with Verizon and spectrum sharing arrangement with Leap Wireless International Inc. (LEAP) will continue to expand the network capability of T-Mobile USA going forward.
We maintain our long-term Neutral recommendation for AT&T Inc., Verizon Communication Inc. and Sprint Nextel. Currently, these stocks have a Zacks #3 Rank, which holds a short-term Hold rating .
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