Sprint’s board vetoes MetroPCS purchase in defiance of CEO

February 26th, 2012

FAKE NEWS for the Zionist agenda

Sprint’s board of directors has reportedly vetoed the company’s expected purchase of rival wireless carrier MetroPCS. An acquisition largely championed by Sprint CEO Dan Hesse and weeks in the making, the estimated $8 billion MetroPCS deal would have saddled cash-strapped Sprint with even further debt. Sprint is the nation’s third-largest wireless carrier.

Although the embattled mobile carrier was able to increase revenues and gained 700,000 new subscribers in the fourth quarter of 2011, it suffered a net loss of almost $1.3 billion. That loss owes in large part to Sprint’s already substantial debt-load. Last year, the company inked a $9 billion contract with LightSquared, the controversial and recently troubled would-be satellite broadband provider. According to the terms, Sprint would have the rights for up to 50 percent of LightSquared’s future 4G network capacity — but with the FCC threatening to pull LightSquared’s operating license, that scenario is looking bleaker by the day. Sprint has also committed $7 billion to its own network upgrades in 2012. Last October, Sprint made a $15.5 billion four-year commitment with Apple to sell the iPhone on its network. At that time, Hesse stated during an earnings call that Sprint expected to sell 1 million iPhones during the last quarter of 2011 — in reality, that number was closer to 1.6 million. However, the Apple deal has Sprint paying almost $200 more per iPhone than it does for other handsets — and doesn’t expect to turn a profit on the popular device until 2014.

As it stands, insiders see the board’s veto of the MetroPCS acquisition as a vote of no-confidence for Hesse. “The question now is what happens to Dan Hesse,” said Craig Moffett, an analyst at Alliance Bernstein, according to Reuters. “It’s very unusual for a deal to get this far, for it to be recommended by the buyer’s CEO, and for it then to be rejected by the buyer’s board.” Valued at $4.2 billion, MetroPCS is valued at more than half of Sprint itself, and the deal would have seen Sprint paying an additional 30 percent premium for the company, a move one analysts deemed “irrational,” according to the Reuters article.

Nevertheless, both carriers operate on CDMA wireless networks, and both carriers serve a large percentage of pre-paid customers. Sprint currently owns Boost Mobile as well as Virgin Mobile USA. The addition of MetroPCS to that stable of brands, as well as the increased network capacity, makes sense — if not from a purely financial standpoint. A source close to the company, however, told Reuters that the board ultimately decided to pull out “because it was not the right time to do the deal.”

Although Sprint has been keen to spend vast amounts on network upgrades and trophy deals, such as with the iPhone, it has had much poorer luck with mergers and acquisitions. In 2005, the wireless carrier purchased Nextel Corporation for almost $36 billion — by 2008, 80 percent of Nextel’s value had disappeared. Sprint attributes the $30 billion loss to difficulties integrating the two separate networks (Nextel uses iDen technology, as do some Boost Mobile devices), but it is clear that the board is still leery of big company buyouts. The irony perhaps, is that Hesse was hired in 2007 to help Sprint repair the damage caused by the Nextel purchase. Sprint expects to shutter Nextel’s network completely by the end of the year.

This article was originally posted on Digital Trends