THERE'S MORE TO THE STORY THAN YOU'RE BEING TOLD.
As currently proposed, along with the merger of the Sprint and T-Mobile, other brands owned by the two companies would also be centralized under the ownership of the new T-Mobile brand. These include Boost Mobile and Virgin Mobile USA, currently owned by Sprint; and MetroPCS, currently owned by T-Mobile. Combined, these three companies command more than 40% of the prepaid wireless market. But the impact could be felt well beyond the more than 30 million prepaid subscribers who would be consolidated under this deal.
These prepaid brands serve an extremely valuable need for a tremendous number of wireless consumers. They’re the challenger brands in the space, and they have the lowest rates, simply because they’re competing with each other so aggressively for prepaid customers. But in all likelihood, these types of deals go away if all the challenger brands serve the same master.
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 Mobile Virtual Network Operators (MVNOs) and bad for the economy.
Therefore, we're asking regulators and lawmakers to give specific consideration to the ramifications this merger will have on prepaid wireless consumers. We're demanding that the new T-Mobile be forced to divest of Boost Mobile and MetroPCS and that new regulations be imposed to protect wholesale pricing for MVNOs, so that they may continue to play an important competitive role on behalf of consumers.
“The new company will have some of the most iconic brands in wireless—T-Mobile, Sprint, MetroPCS, Boost Mobile, Virgin Mobile—and will determine brand strategy after the transaction closes.”
—FROM T-MOBILE/SPRINT JOINT PRESS RELEASE
WHILE THEY LOBBY FOR REGULATORY APPROVAL, THESE COMPANIES ONLY WANT YOU TO SEE THE UPSIDE.
BUT THERE'S TOO MUCH AT STAKE TO JUST FIGURE IT OUT LATER.
"A majority of respondents believes it will lead to higher prices and reduced competition." —HarrisX Survey, May 2018
THE IMPACT ON EMPLOYEES:
For the employees of MetroPCS, Boost Mobile and Virgin Mobile, determining their fate “after the transaction closes” may just be too late. The current official corporate merger communications focuses solely on projecting silvery outcomes for staffing of "the new T-Mobile." But even those forecasts don’t seem grounded in reality. There’s a reason companies merge: to gain scale and operating efficiency. And when you bring them together, you trim the unnecessary overlap to attain that efficiency.
THE IMPACT ON INDEPENDENT RETAILERS:
Without continued level of competition and wholesale pricing protections in place, this deal stands to put most MVNOs out of business. Ultimately this all trickles down to the tens of thousands of independent wireless dealers that dot the country. Prepaid offerings are their bread and butter. So this merger could impact these folks dramatically—resulting in business closures, job losses and negative effects on local economies.
THE IMPACT ON ALL CONSUMERS—NOT JUST THEIR CUSTOMERS:
With less competition in the overall prepaid marketplace, there'd be less incentive for other wireless carriers to keep prices lower as well. 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.
When we map the locations of Boost Mobile and MetroPCS dealers in New York and New Jersey as an example, two things become extremely evident. First, that the brands compete against each other in close proximity, because there's plenty of consumer demand for prepaid wireless products. There's sufficient demand to support the concentration of retail options. And it highlights that if these brands were controlled by one parent company, they would likely close many of the stores to reduce overlap and increase operating efficiency.
But it's also evident that these brands are more prominently represented in areas where household incomes are lower. And this accentuates the importance of prepaid for this financially vulnerable consumer segment. These are folks who rely on wireless service just as anyone. And healthy competition in the marketplace helps ensure that they can stretch their dollars further.
"A T-Mobile/Sprint merger, without divestiture of the Boost Mobile brand, would have costly consequences to our member independent wireless dealers across the country. If the 'new T-Mobile' is permitted to retain all of these brands, it will likely lead to consolidation, reduced competition and excessive control of the prepaid wireless market by a single carrier. And that would be devastating to our retailers."
National Wireless Independent Dealers Association