Union says merger could cost 28,000 jobs
The U.S. Federal Communications Commission’s comment period regarding the proposed Sprint/T-Mobile US merger ended on Aug. 27, and as the clock ticked down opponents of the proposed $146 billion deal outlined their objections. Altice, Dish and the Rural Wireless Association all told the FCC the move from four to three national carriers would harm American consumers.
These anti-merger comments come on the heels of a bombshell from the Communications Workers of America union, which claims the deal could kill some 28,000 jobs as the combined company realizes workforce efficiencies.
Earlier this year Altice, a French cable provider, spun off Altice USA to better address the varying market dynamics. In November 2017, Sprint and Altice USA announced the carrier would leverage the cable company’s fiber network to densify its own network through the deployment of thousands of small cells. In exchange for the network access, Altice got access to Sprint’s spectrum to turn up a mobile virtual network operator offering. Former Altice CEO Michel Combes earlier this year took over for Marcelo Claure as CEO of Sprint.
As it relates to the merger, Altice USA is concerned about its ability to grow an MVNO business if it’s reliant on a combined company called the New T-Mobile. From Altice’s comment to the FCC, “Although Altice is confident in its ability to enter the wireless market in 2019 based on its current regional MVNO partnership with Sprint, a partnership that is strategically important for both Sprint and Altice, Altice has concerns about the opportunity to expand its wireless service nationwide, and over the long term, because T-Mobile and the New T-Mobile have made no tangible commitments regarding meaningful support for current MVNO partners, including offering such partners the full nationwide network that the New T-Mobile will enjoy.”
On how a further consolidated carrier market, Altice said the harm is “clear and substantial…for all market participants and American consumers.”
Dish, which has also announced as-yet unfunded plans to construct a nationwide 5G network rather than lose spectrum licenses it has been sitting on, took issue with a primary pro-merger talking point—that the combined Sprint/T-Mobile US would be positioned to help the U.S. lead in 5G deployments.
According to Dish, the companies don’t need to combine to meet that goal, which seems supported by the carrier’s individual 5G-related plans, which are well-articulated. “Each company appears to be able to achieve such a transition [to 5G], even assuming that simultaneous LTE and 5G services are necessary,” according to Dish’s filing with the FCC. “The applicants have failed to relate the 5G service they plan to provide to the spectrum they claim they need for such service. Among the three pillars that define 5G, only one, enhanced mobile broadband, requires large swaths of spectrum.”
Another major benefit T-Mo and Sprint execs are putting forward is the ability of the combined company to extend broadband, and competition, into underserved parts of rural America. The Rural Wireless Association, which advocates for rural broadband investment, doesn’t think that’ll be the case if a merger goes through.
According to the group, Sprint has a history of working with rural carriers via roaming agreements and spectrum license leases. “Given the difficult that rural wireless carriers often have in accessing spectrum, these lease agreements are critical, but are likely to disappear if the propose merger is consummated,” according to FCC documentation. “Meanwhile, T-Mobile has neglected rural America for over 20 years. T-Mobile has focused most of its energy on urban areas…T-Mobile will frequently enter only into unilateral roaming agreements under which the rural carrier’s subscribers can roam on T-Mobile’s network, but with no possibility of T-Mobile’s subscribers roaming on the rural carriers’ network—even where T-Mobile’s network is substandard or non-existent.”
