T-Mobile US chief John Legere (pictured) offered to lock existing wholesale rates indefinitely for MVNO partners concerned the operator’s proposed merger with Sprint will raise costs.
During a hearing before Congress, Legere insisted wholesale prices will drop alongside consumer costs, but said he was willing to sign a deal with MVNOS to “take their rates right now and lock it in for as long as they want”.
In a letter submitted ahead of the hearing, C Spire CEO Hu Meena called Sprint “the one true maverick in the wholesale market” and warned a merger would “end the downward pressure that Sprint has exerted” on pricing, harming rural operators and MVNOs.
Sprint chairman Marcelo Claure argued that without the merger, the operator would likely have to raise prices across the board to fund next generation investments. He said it would need to spend nearly $25 billion to extend 5G across its current footprint, but noted the company already has $40 billion in debt and “we don’t make any money”.
“A company that doesn’t generate free cash flow doesn’t have the ability to invest.”
“We would basically have to borrow that money from the bank and potentially raise prices, and we would only be able to offer 5G in selected areas.”
However, if the merger is approved, Legere said the combined company plans to buy more spectrum: “We’re participating in a mmWave spectrum auction as we speak, and there will be a lot more spectrum that’s needed in addition to what we’re going to get with the coming together of these two companies.”Subscribe to our daily newsletter Back