Sprint's Hesse mum on consolidation rumors
KANSAS CITY, Mo. (AP) – Sprint Nextel Corp.'s CEO said Thursday that consolidation in the wireless industry may be coming, but it will be difficult.
Speaking to analysts in New York, CEO Dan Hesse said he doesn't comment on "media speculation" after the U.K.'s Sunday Daily Telegraph reported that Deutsche Telekom AG, the parent of T-Mobile USA, was considering a bid to buy Sprint, the third-largest U.S. wireless provider.
The rumors have since cooled, with reports saying a bid isn't imminent.
Hesse said consolidation would be harder under the Obama administration, which he said has signaled a tougher stance toward the wireless industry. He said regulators would likely require a lot of concessions from those involved.
"The smart money says it will be more difficult," Hesse said. "The process will be more arduous, the asks of what you have to give up would be greater. We'll have to see who wants to test the waters."
Hesse also defended the right of carriers to have exclusive deals with the makers of certain wireless devices, such as Sprint's exclusive right to sell Palm Inc.'s Pre.
But he said he felt it was a "legitimate question" of how long those exclusivity periods should run. AT&T Inc. has held the exclusive rights to Apple Inc.'s iPhone for more than two years.
The Federal Communications Commission is looking into the practice, concerned that such exclusive deals harm competition. The industry says the deals give product developers more security that they will be able to recoup their investment among the crowded field of wireless devices.
"I think that exclusives are good, it spurs innovation, but it's a fair question that they need to analyze is should there be a limit on the period of time of those exclusives," Hesse said. "I think there's a likelihood that something will be done along those lines."
Sprint shares slipped 8 cents to $3.90 in trading Thursday. They have traded in a 52-week range of $1.35 to $7.57.