T-Mobile US faced the prospect of regulatory intervention in a spat with independent mobile sellers over changes to its Metro by T-Mobile prepaid dealer programme, which participants claimed will negatively impact their profitability.
National Wireless Independent Dealer Association (NWIDA) president Adam Wolf told Mobile World Live the dispute centres on revisions to operational requirements and compensation for participating dealers, which mandate device accessories be supplied by a particular vendor and eliminate payouts previously given to dealers for certain in-store customer transactions.
The move applies to more than 8,000 independently-owned shops, which comprise approximately 95 per cent of all Metro by T-Mobile stores, he said.
Though NWIDA does not own or operate any of these, Wolf noted the trade group contacted the Federal Trade Commission and Department of Justice on behalf of impacted dealers to address what it views as a competition issue after attempts to discuss the matter with T-Mobile executives stalled. Talks with the regulators remain ongoing.
He said part of the problem is that T-Mobile “wants to treat these stores like franchisees” when they are actually licensees, a legal distinction which gives them more autonomy.
If not addressed, he warned the changes T-Mobile is pushing “will severely impact the profitability of these dealers to the point where they may need to fire employees, to the point that they may need to close and go out of business”.