CWA to State Attorneys General: T-Mobile Sprint Merger Will Cause Massive Job Loss, Raises Significant Competitive Concerns

Attorneys General must investigate the impact of anti-competitive, job destroying merger
Monday, September 17, 2018

Washington, DC – Last week, Christopher Shelton, President of the Communications Workers of America (CWA), wrote to all 50 State Attorneys General to express concern over the proposed T-Mobile and Sprint merger and to press for deeper investigations into the impact of the merger. The letter, which was first reported on by Reuters, included a detailed analysis of job losses in the top 50 metropolitan areas. 

The analysis finds that the merger would result in the loss of more than 28,000 jobs across the country, contrary to the unsubstantiated claims of job creation from the merging parties. Approximately 24,000 job cuts will come from the elimination of duplicate retail stores and another 4,500 will be cut due to duplicate headquarters functions. Furthermore, the proposed horizontal merger will eliminate market competition and increase concentration in the national and local markets for mobile telephony, broadband services, and prepaid wireless services. As a result, consumers will see increased prices and less innovation.

The letter points out that T-Mobile and Sprint's claims that the deal will accelerate the move to 5G wireless actually contradicts their statements to their own shareholders. Just last month, T-Mobile told Wall Street that "our advancements in network technology and our spectrum resources ensure we can continue to increase the capabilities of our network as the industry moves toward 5G." There is also zero evidence that rural Americans will benefit from the merger.

The letter also raises national security concerns regarding the possible integration of Chinese government-owned Huawei and ZTE equipment in the T-Mobile and Sprint networks. Sprint, and its majority owner SoftBank, have used Huawei equipment in its network for years, and in 2012 Sprint was ordered by the Committee on Foreign Investment in the U.S. to remove Huawei equipment from its network. However, three years later, Sprint admitted that it still had Huawei equipment in the network. Since 2015, SoftBank has partnered with the two Chinese companies to develop and deploy 5G wireless technologies in Japan. In a time when cyber-security is of utmost importance, this aspect of the merger should raise flags and certainly warrants a thorough inquiry to determine the nature of foreign involvement.

"The proposed T-Mobile/Sprint merger proves to be a much greater threat than benefit to consumers and workers," says Christopher Shelton. "We hope that State Attorneys General will heed our calls for a thorough investigation in order to protect both jobs and the competitive wireless market."

Read the letter in full here.

Read the Reuters article here.

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