T-Mobile Promised Major Job Growth Post Sprint Merger. SEC Filings Show The Exact Opposite Happened

from the Charlie-Brown-and-Lucy-Football dept

When T-Mobile was selling its $26 billion Sprint merger to regulators, it told anybody who'd listen that the deal would create a parade of new jobs. In a 2019 blog post that still hasn't been deleted (amateur move, guys), ex-T-Mobile CEO John Legere didn't mince words in his predictions:

"So, let me be really clear on this increasingly important topic. This merger is all about creating new, high-quality, high-paying jobs, and the New T-Mobile will be jobs-positive from Day One and every day thereafter. That’s not just a promise. That’s not just a commitment. It’s a fact."

"...These combined efforts will create nearly 5,600 new American customer care jobs by 2021."

2021 is here, and a recent SEC filing shows that the company has actually lost about 5,000 jobs in a little under a year and a half. That number could potentially be even higher. As noted last April, T-Mobile quickly set about immediately shuttering its Metro prepaid division (a decision that had nothing to do with COVID), resulting in an estimated 6,000 layoffs (something T-Mobile said wouldn't happen). Last June, the company fired hundreds of additional Sprint employees during a conference call that lasted all of six minutes.

There's likely more where that came from, as the company is still operating dual headquarters in both the Pacific Northwest and Overland Park, Kansas. In most mergers like this, the acquiring company tries to keep things the same for about a year to keep folks calm before the hatchets are unveiled.

Of course, this is all something that consumer groups, antitrust experts, unions, and even Wall Street stock jocks predicted. Most of those folks predicted that, even though it would take time, the deal would eliminate anywhere between 10,000 and 30,000 jobs. That's in addition to their complaints that the deal effectively reduced US wireless competition by 25% via 4-3 carrier consolidation, something that historically always, sooner or later, results in higher prices for consumers (see: Canada, Ireland, Germany).

Granted in his original blog post, Legere made fun of those critics and insisted they were simply making shit up:

"I guess if the real numbers don’t tell the story you want, you can just make up new ones? It’s actually offensive."

Yes, accurate predictions are so offensive. Granted John Legere, who successfully built T-Mobile from an also-ran into a major competitor (thanks in part to regulators blocking AT&T's 2011 merger with T-Mobile), was quick to leave the company shortly after the deal, offloading his Central Park West Penthouse to Giorgio Armani for $17.5 million (how many employee jobs is that?). And as Light Reading notes, T-Mobile's revenues continue to soar as it continues job cuts it promised wouldn't happen:

"In 2015, T-Mobile was making about $650,000 per employee. Last year, it generated almost $912,000. For workers at the company, that is not a source of comfort."

Granted this happens absolutely every time there's a major telecom merger. Companies throw out bullshit job growth claims, knowing full well such consolidation inevitably will result in massive job cuts a year or two later as redundant positions are eliminated. The press hypes the false merger "synergy" claims, then (usually) can't be bothered to follow up with reports highlighting how the promises were empty. It's a massive ouroboros of dysfunction, and no matter how many times we live through the exact same experience (AT&T's countless mergers, Verizon's countless mergers, Comcast's repeated mergers), America has a severe allergy to learning absolutely anything from experience.

Mindless consolidation and "growth for growth's sake" hurts employees, markets, and consumers. Full stop. Regulators could have forced Sprint to find another suitor, preferably one that didn't result in a loss of overall competitors (Dish, Comcast, Charter, Google, Amazon). Instead we signed off on another massive deal, based on a parade of false promises. Then, in two or three years when US wireless prices (already some of the highest in the developed world) are even higher, everybody will stand around with a dumb look on their faces wondering how exactly we got this point. Wash, rinse, repeat.

Filed Under: competition, hiring, jobs, john legere, lies, merger, mobile service
Companies: sprint, t-mobile

Netflix Reveals It Throttles AT&T, Verizon Customers To Save Them From Usage Caps, Overage Fees

from the neutrality-soap-opera dept

Netflix this week admitted that the company has been throttling the video streams of most wireless customers around the world to 600 kbps, a practice the company claims is necessary to protect users from usage caps and wireless overage fees. It was the first time Netflix acknowledged the practice, which the company said it's been engaged in for five years. The more interesting part? The company admitted to the Wall Street Journal that it's apparently not throttling the video streams of companies whose consumer policies Netflix agrees with:

"Netflix said it doesn’t limit its video quality at two carriers: T-Mobile and Sprint Corp., because “historically those two companies have had more consumer-friendly policies.” When customers exceed their data plans on Sprint or T-Mobile, the carriers usually slow their network connections, rather than charge overage fees."

The Netflix reveal came after T-Mobile CEO John Legere spent last week defending T-Mobile's controversial Binge On service, which throttles partner video streams to 1.5 Mbps or 480p. Legere spent much of the week poking various news outlets with claims that AT&T and Verizon throttle video streams even further than Binge On, something both companies spent much of last week denying. It didn't apparently take long for the Journal to dig deeper and get an admission out of Netflix that it was the one doing the throttling.

Despite the clear admission from Netflix that it's the one throttling, Legere continues to take to Twitter to blame AT&T and Verizon, meaning he either didn't understand the story he'd read, or he's intentionally being misleading in an attempt to redirect people from recent Binge On criticisms:

2/ I called out @verizon and @att just last week about this – they denied, tried to make it about throttling and called me ‘dopey’!

— John Legere (@JohnLegere) March 24, 2016

AT&T, meanwhile, hoping to cash in on the story and paint Netflix as a hypocrite, had its top lobbyist pretend to be "outraged":

"We’re outraged to learn that Netflix is apparently throttling video for their AT&T customers without their knowledge or consent,” said Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs."

AT&T's "outrage" likely stems from the fact that the throttling kept AT&T users from hitting their usage caps and incurring overage fees sooner, costing AT&T money.

After revealing its throttling to the Journal, Netflix posted a new blog post in which it pretended it was revealing its throttling practices by choice, "announcing" it was working on tools that would help customers better manage their data consumption:

"We believe restrictive data caps are bad for consumers and the Internet in general, creating a dilemma for those who increasingly rely on their mobile devices for entertainment, work and more. So in an effort to protect our members from overage charges when they exceed mobile data caps, our default bitrate for viewing over mobile networks has been capped globally at 600 kilobits per second. It’s about striking a balance that ensures a good streaming experience while avoiding unplanned fines from mobile providers.

This hasn’t been an issue for our members. Our research and testing indicates that many members worry about exceeding their mobile data cap, and don’t need the same resolution on their mobile phone as on a large screen TV to enjoy shows and movies. However, we recognize some members may be less sensitive to data caps or subscribe to mobile data plans from carriers that don’t levy penalties for exceeding caps. As we develop new technologies, we want to give all our members the choice to adjust their data consumption settings based on their video preferences and sensitivity to their ISPs data overage charges. We’ll provide more details as we get closer to launch.

So to be clear: Netflix should have been more transparent about what it was doing and provide users with better controls (desktop users can adjust streaming quality rather easily), especially if it's going to lecture ISPs on transparency. That said, given Netflix's positions on net neutrality and usage caps, you're sure to see the story blown up into more than it is by ISPs and their various mouthpieces, who'll likely either call this a net neutrality violation itself (it's not; throttling yourself isn't like throttling a competitor, and users have a choice of streaming services) or continue the industry claim that Netflix is a shady villain that treats giant, lumbering telecom duopolies unfairly.

But the crux of the problem here remains usage caps, not Netflix. Sure, Netflix isn't being entirely altruistic. Annoyed customers banging their heads against usage caps watch less streaming video, which for many fixed-line ISPs like Comcast is the entire point. For wireless carriers it's obviously different, with the goal being to drive consumption however possible. But the fact that a company was forced to offer a lower quality service -- instead of competing to provide the best stream possible -- shows how arbitrary usage caps by their very nature distort and damage markets. And that's before you even get to the anti-competitive implications of zero rating.

Filed Under: mobile service, net neutrality, throttling, videos
Companies: at&t, netflix, sprint, t-mobile, verizon

Judge Says 'There's An Ad For That...' And It's Ok For Now

from the let-it-play dept

Recently, AT&T sued Verizon over its "There's A Map For That" ad, that mocked AT&T's 3G network coverage, while playing on the Apple iPhone slogan of "there's an app for that." It seemed like an odd thing for AT&T to do, as it really just called more attention to the ad and the differences in 3G networks. Now, to make matters even worse, a judge has refused to issue an injunction stopping the ad. That doesn't stop the lawsuit, though, and the ad might still get taken down if AT&T wins, but it's unlikely Verizon's ad campaign is going to last until the lawsuit is finally decided, anyway. So for now, all it's done is driven a lot more attention to the ad, in which Verizon comes out favorably.

Filed Under: 3g, ads, competition, mobile service
Companies: at&t, verizon wireless

Engadget Mobile Threatened For Using T-Mobile's Trademarked Magenta

from the morons-in-a-hurry dept

We've certainly seen some dumb trademark lawsuit threats lately, but T-Mobile parent Deutsche Telekom's supposed threats to Engadget may take the cake. It's not that extraordinary for a company to trademark a distinct color that it uses in its logo, and that's exactly what T-Mobile did last year with a trademark (in Germany only) on the color magenta. Now, it's important to realize that this doesn't mean T-Mobile "owns" that color or can forbid anyone else from using it. It really just means that competing providers offering similar goods and services might run into trouble for using the same color, potentially leading to consumer confusion. When this news broke, plenty of people got up in arms, suggesting that T-Mobile "owned" magenta, which just isn't true. However, it does look like its lawyers think it gives them rights far beyond what it actually does.

According to Engadget, Deutsche Telekom lawyers have sent a nastygram to Engadget, because the blog uses magenta in the logo for its sister site, Engadget Mobile. Of course, it's hard to believe that anyone would go to Engadget Mobile and believe it was somehow affiliated with T-Mobile. The logos are quite different, and the services they offer (obviously) are totally unrelated. In fact, this whole thing seemed so ridiculous that I assumed it was an April Fool's joke -- though the folks at Engadget insist it's not. And, if you want icing on the cake, last year Engadget was one of a few sites that defended T-Mobile for its magenta trademark when it became news last year.

Filed Under: engadget, engadget mobile, magenta, mobile service, trademarks
Companies: deutsche telekom, t-mobile