WHEN: Today, Wednesday, April 1, 2020
WHERE: CNBC's "Squawk on the Street"
The following is the unofficial transcript of a CNBC interview with T-Mobile CEO Mike Sievert and CNBC's David Faber on CNBC's "Squawk on the Street" (M-F 9AM – 11AM) today, Wednesday, April 1st. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2020/04/01/watch-cnbcs-full-interview-with-t-mobiles-new-ceo-mike-sievert.html.
All references must be sourced to CNBC.
DAVID FABER: It is a momentous day for Sprint and T-Mobile. Almost two years—almost a full two years after announcing their intent to merge, closing a deal today and becoming one. It's also a momentous day for our next guest, Mike Sievert, who is taking over officially as the CEO of the combined company today. Of course, John Legere has been the long-time CEO of T-Mobile. Mr. Sievert, very nice to have you with us this morning. Thank you for joining me.
MIKE SIEVERT: Hey, David. Thanks for having me.
DAVID FABER: You know, 43 billion dollars. That was the number on April 27th, I think it was, when you originally announced this deal, T-Mobile and Sprint, of 2018, by the way. 43 billion in synergies. 26 billion of that from the network side. Is that number still the same? Is that, which was the driving force behind so much of why you wanted to do this, still in play as the key number?
MIKE SIEVERT: Can you believe it? You just said the date, April 28th of 2018. This has been such a journey. Yes. That's still the number. You know, we've had eight quarters of blockbuster results during the pendency of this merger of T-Mobile. And nothing has changed in our long-term thesis. This is about bringing together the two companies and those uniquely positioned assets of the two, to unlock the potential of massive scale and invest the synergies from that massive scale into creating the best 5G network. And yep, you know, the network portion of it is 26 billion in our forecast over the long-haul. We see 43 billion dollars in total opportunity. So, all of the potential that we saw when we announced this continues to be what we see in it. That's why we pursued it so ambitiously during the long, long pendency of this deal.
DAVID FABER: Yeah. Well, of course, a lot has changed very recently in terms of the landscape for the U.S. economy. You did focus so much—well, you and of course, John Legere, and Marcelo Claure and others—in arguing for why this deal should be approved on 5G, on your ability to bring it throughout the country, offer speeds for which we have not seen. How much of the current economic crisis is going to impact the ability to bring 5G to the country, and perhaps even more importantly, the ability of people to actually buy the new handsets they're going to need to access this service?
MIKE SIEVERT: Well, in many ways, what impacts first and foremost is the importance of what we do. You know, one thing we've learned or certainly has been reinforced for us is that the service we bring to the American public is essential. You know, as we're social distanced, the technology that brings us together is more important to us than ever. And consumers will prioritize spending in this category if they need to. I can tell you this: this crisis is going to be short-lived. But we'll return to some sort of normal after it. What that normal looks like, though, nobody knows. It's certainly going to be a different normal than the one we had before entering the crisis. If that norma, is the normal where more Americans are under tougher economic circumstances and have tighter budgets and have to make more choices, we're going to be here to serve them. We're going to be here perhaps as the best positioned player to serve them. If you have a tight budget, you want value. That's what the new T-Mobile thesis has always been about, breaking down that tradeoff that customers have been forced to make in this category since the beginning of time. Do you want better value or do you want the best network? Pick one. This merger is about creating a company that says very emphatically, you can have both. And I think in the circumstances that we'll most likely find ourselves in economically when this crisis abates, that's a message that will be very important for the American public.
DAVID FABER: Mike, how quickly can you put those Sprint Spectrum assets that you now own in your network to deliver these 5G speeds that obviously are one of the keys to why regulators approved the deal?
MIKE SIEVERT: Very quickly. You know, our teams, Neville Ray and John Saw and team, have had a long time during the pendency of this merger to plan the network. We will start lighting up 5G on what was Sprint's Spectrum almost immediately. And we'll keep you informed as we do that. That will start to benefit consumers who is came from both sides of this business immediately. And, you know, so that's one of the -- I guess benefits of the long pending merger—that we've had some time to plan it and we'll be able to start bringing the benefits. You asked earlier whether the crisis will affect that. And you know, it might. It might in permitting and other things as governments are, around the country, local municipalities are operating at less than their usual capacity. But it won't slow us down. We've been classified by the Department of Homeland Services and the administration as essential services. We are allowed to continue operating. We've determined from a network standpoint we can do that safely. Much of the work tower by tower happens by crews, individual crews of one person. Sometimes it's three, four, or five people that arrive in separate cars, work outdoors and work at a safe distance from each other. So, we're planning to proceed. You know, it's essential for the American public we get this network built and we determined we can do it safely. So, other than some issues around permitting and things like that, we don't see a slowdown in our ability to bring this network to bear.
DAVID FABER: But what about a slowdown in sales, Mike? I mean, you've got like all your competitors, 80% or so of your company-owned stores are closed. I would have to imagine that's impacting sales or is that being made up for online?
MIKE SIEVERT: It certainly is. On March 17th, we issued an AK saying we felt that the impacts of the crisis would be material. And they will be. What I'll say is that they'll be material but short-lived. Remember, you know, yes, we've got – I think it's proforma or combined now, about 75% of our stores closed. And that has an impact, of course. A major one on sales. But so does the rest of the industry. And in the grand scheme of things, if it's a few weeks or some low single digit of months where we're prioritizing the safety of our customers and our people, that's something we're well-positioned to get through. You know, this is a recurring revenue business where people have an ongoing subscription. And we're the value player in this market. So, we're here to serve them. We think over the long haul while there may be a short-term material impact, nothing in our thesis is unchanged. And the potential we've been talking about on the merger is as exciting as ever.
JIM CRAMER: Mike, Jim. So glad you called in.
MIKE SIEVERT: Hi, Jim.
JIM CRAMER: I'm trying to figure out, John Legere always made me so excited about you guys and he did have kind of a different style. Let's say that. One of the things that I'm trying to figure out is if I'm a Sprint customer, why should I necessarily go with T-Mobile? What kind of proposition are you giving me that makes it so I shouldn't go to Verizon?
MIKE SIEVERT: Well, it's about having the best network and the best value. It's about not having to pick, Jim. You know, this market as I was telling David, has always made people pick. And you know, Verizon claims to have the best network. That's something that they're going to be scrambling to try to talk about as we build the world's best 5G network with the combined assets of this company. What we're going to be able to offer Sprint and T-Mobile customers, and AT&T and Verizon and big cable customers, is the best value and the best network simultaneously. That's unprecedented in this industry.
JIM CRAMER: Well, also you talk about the best value, but if you do that, then you've got to buy from Huawei. They're the cheapest. We all know it. But some of us question whether buying from Huawei means Huawei hears, or the communists hear everything that we say. It certainly--wouldn't put the past them. Because those companies are supposed to be dedicating to spying. What do you do when the lowest cost producer of equipment is Huawei, but they may not be such a great actor?
MIKE SIEVERT: Well, our biggest suppliers are Ericsson and Nokia. And we're planning to expand our 5G network with our existing suppliers. And with our existing suppliers, we have a synergy pool on the network side that we see line of sight to $26 billion in synergies. Just from the network side, $43 billion overall. So, this merger as we're planning it with our current partners is something that will unlock the potential of massive scale, finally positioning us at a scale comparable to At&T and Verizon, but with obviously a culture and a brand and a value proposition that is so much more attractive.
DAVID FABER: Mike, the new company obviously still owned a great deal by Deutsche Telekom T-Mobile's long-term parent, also by SoftBank. SoftBank though is talking about potentially selling some of their stakes sooner than may have been anticipated. Is that your understanding? Will SoftBank be selling stoke shares in markets sooner than might have been thought?
MIKE SIEVERT: You know, you'll have to ask them that. We're delighted to have SoftBank as a parent company along with Deutsche Telekom. Today we welcomed Marcelo Claure and Ron Fisher from SoftBank to our board of directors. I think we're going to make a great team. But you'll have to ask them about their long-term plans. I see huge potential for us here with Deutsche Telekom and with SoftBank and then here in North America with TWS to build some interesting collaborations and cross oceanic synergies. So, I really like the potential of this as we can collaborate with partners on a global scale now. So, we're very, very excited to have them as a part of the family.
DAVID FABER: Mike, does the Sprint brand go away quickly here?
MIKE SIEVERT: The main brand obviously will be T-Mobile. And during the crisis here, we're not going to make big changes. So, think about the summer time frame as being when we start to unify and market with all of our stores and all of our advertising and all our offers in a more unified way. Mid-summer, we haven't picked a date yet. But that's certainly always been our intention. That doesn't mean the Sprint brand will go away completely. We haven't made those decisions yet. The Sprint brand has an incredible legacy. But we believe that right now in wireless it makes all the sense in the world to unify under the T-Mobile brand. So, the company is called T-Mobile and the flagship brand of the company is called T-Mobile.
DAVID FABER: Right. And Mike, I look forward to many future appearances by you, we hope, as Mr. Legere used to join us. Final question from me here though, something we used to talk about often before the current crisis. How will 5G impact people at home--especially now given all the streaming we're doing? Do you believe you'll have a competitive product in 5G wireless into the home that competes with right now the cable that I am using to connect to the internet?
MIKE SIEVERT: Well, first of all, David, it's great to talk to you, and I'd love to come back and talk more. You followed this merger so well. It seems like you've broken every major story including the fact that I would become CEO. So, thank you for following the company so closely. Yes, you know, 5G obviously, it's more important now than ever. Because what we're really realizing during social distancing is these connections are more important than ever. And remember, our competitors have 5G strategies that are so different from what new T-Mobile can do. Verizon used to talk about millimeter-wave deployments in sporadic place here and there around the country. We intend to cover 99% of the country. Not just with low band 5G like standalone T-Mobile but with broad and rich 5G that's transformational. 99% of the country. 90% of Americans, in fact, will have 100 megabits per second or better. And the national average will be better than 450 megabits per second. So, this is game-changing and it's one of the reasons we worked so hard to bring this out.
DAVID FABER: Well, we look forward to obviously following your efforts and talking to you in the future, and certainly appreciate you joining us on this momentous day. Your first as CEO and obviously the first with the combined Sprint and T-Mobile, 23 months after you guys announced it. Mike Sievert, thank you for joining us.
MIKE SIEVERT: Thanks, guys.
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