T-Mobile Begs Small Wireless Carriers To Support Its Awful Merger. The Problem: They Hate It Too

from the merge-ALL-the-things dept

We've repeatedly explained how T-Mobile and Sprint's latest attempt to merge will be terrible for both jobs and competition. Despite what T-Mobile and Sprint executives have claimed, history suggests the reduction of total wireless carriers from four to three will likely result in less incentive than ever to seriously compete on price. Similarly, while T-Mobile and Sprint have told regulators that the deal will somehow create an explosion in new jobs, Wall Street analysts have predicted that the deal could kill off anywhere from 10,000 to 30,000 jobs as the new company inevitably eliminates redundant positions.

While some diehard T-Mobile and Sprint fans have bought into these claims, most objective observers with a firm grasp on history realize that the promised "synergies" of telecom mergers like this one almost never materialize. And the obvious impact on competition and jobs is a major reason this merger and others like it (including AT&T's attempt to acquire T-Mobile) have been scuttled by regulators. There's simply too many examples of this kind of consolidation resulting in massive monopolies with little incentive to give a damn (hi Comcast and AT&T, didn't see you standing there).

T-Mobile's looming merger is so unpopular, the company was forced to quietly hire Trump ally Corey Lewandowski in an effort to seal the deal (the whole mocking a kid with Down Syndrome thing be damned). Reuters notes that the company has also started reaching out to smaller wireless carriers, urging them to not only express support to the FCC, but submit favorable editorials to major papers supporting the merger. The problem: they don't much like the deal either:

"One wireless operator that works with T-Mobile said it received an email with suggestions on how to support the deal. The company declined to be named because it has concerns about how it would be affected in the merger.

The email from T-Mobile, seen by Reuters, suggested the company write an op-ed supportive of the deal or submit a letter of support to regulators. The email also offered talking points the company could use during media interviews, such as how the merger between the No. 3 and 4 U.S. carriers would help the build-out of a 5G network."

Countless news outlets (The Hill quickly comes to mind) simply adore publishing ostensibly "objective" editorials from parties without bothering to disclose obvious financial conflicts of interest. It's a pretty standard practice as companies try to sell regulators and the public on megamergers most people realize operate in stark contrast to the public interest. Worry not though, Reuters quotes one expert as saying there's perhaps "only a little" coercion going on as T-Mobile attempts to pressure smaller companies into supporting the deal if they want to enjoy future, productive relationships with the merged company:

"While it is not unheard of for companies pursuing mergers to ask vendors or customers for support, there could be a small amount of coercion going on, given that some of the smaller wireless companies have direct relationships with T-Mobile, said James Cox, a Duke Law School professor who specializes in corporate and securities law."

The problem for T-Mobile is that many of the same companies they're wooing now have repeatedly come out in opposition to the deal. For example, the National Wireless Independent Dealer Association has said the deal will be "devastating" for prepaid wireless consumers and the nation's 30,000 smaller wireless operators. Peter Adderton, co-founder of Sprint's Boost prepaid service, has also been making the rounds pointing out how the deal is decidedly terrible:

"Given that Sprint and T-Mobile are a dominant force in prepaid, they will have a significant incentive to restrict network access to competing MVNOs,” he says. “If the Boost Mobile and MetroPCS brands are included in this merger, it would be bad for the overall competitive landscape, bad for the prepaid market, bad for our country’s MVNOs and bad for the economy."

It's indisputable that T-Mobile competition has done some excellent things for the wireless industry in the form of added competition. But even with four major players that competition can often be theatrical in nature. And T-Mobile's consumer-friendly "uncarrier" branding schtick (and the hip and admittedly-amusing caricature that is CEO John Legere) is starting to look a little shallow in the wake of the company's opposition to net neutrality, bizarre attacks on the EFF, hiring of Corey Lewandowski, and now peddling of an indisputably-terrible new megaunion.

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Filed Under: competition, merger, mobile, mobile carriers, mobile operators, wireless
Companies: sprint, t-mobile