A US Senate antitrust panel grilled T-Mobile US CEO John Legere and Sprint executive chairman Marcelo Claure about the impacts of a proposed merger, questioning whether the deal would yield consumer benefits and boost competition as the pair claim.
In a recent filing with the Federal Communications Commission (FCC), T-Mobile and Sprint said the deal will lower prices, create jobs, expand coverage and help the US lead the race to 5G. But politicians weren’t convinced.
During one exchange, Senator Amy Klobuchar noted the current four-player wireless market had not mounted a response to Sprint’s offer of unlimited service for $60 per month and asked: “If T-Mobile does not see the need to match Sprint’s lower pricing right now, why should we expect T-Mobile to offer lower pricing if the merger is approved?”
Jobs and prepaid
The panel also pressed Legere and Claure to respond to charges from critics, including the Communication Workers of America (CWA) trade union and Boost Mobile founder Peter Adderton, that the deal will result in job losses and reduce competition in the prepaid space.
Before the hearing, CWA stated the merger could result in more than 30,000 jobs being lost, and called on the operators to “make a binding agreement” to maintain staff numbers.
Legere acknowledged the company would eliminate redundant positions in its first year of operation, primarily in urban retail and corporate staffing, but insisted new positions in customer care, rural retail and broadband would more than offset those losses.
The T-Mobile CEO also batted down concerns about prepaid competition, noting “we have not suggested any change, per se, in the MetroPCS, Boost and Virgin brands” in the wake of the deal. Claure added there is increasing parity between the prepaid and post paid markets, with similar pricing and devices offered in both segments.
“We plan for those prepaid customers to be among biggest beneficiaries” of the merger, Legere concluded.
The hearings came as the Department of Justice (DoJ) and FCC weigh whether or not to wave the deal on. While the Senate committee doesn’t have a direct say in the approval, it can forward key concerns or supportive evidence to the DoJ, which wields the deciding power.