from the dysfunction-junction dept
To gain regulatory approval for its $26 billion merger with Sprint, T-Mobile made numerous promises. One was that the deal would immediately create jobs (there’ve been 5,000 layoffs so far). Another was that the company would work closely with Dish Network to help them build a fourth wireless network that would replace Sprint, theoretically “fixing” the reduction in competition the deal created. As predicted, that plan isn’t working out so well.
T-Mobile was supposed to closely shepherd Dish’s own network build over a period of 7 years, but the two companies have proven largely incapable of getting along. Recently, Dish accused T-Mobile of shutting down its 3G (CDMA) network (which Dish is currently using as it builds a 5G network) prematurely. T-Mobile in turn accused Dish of being too cheap to pay for 4G and 5G upgraded phones for its fairly tiny userbase. This week T-Mobile balked, issuing a hilariously passive aggressive press release saying T-Mobile would be leaving its 3G network on for a little bit longer because Dish was, effectively, incompetent:
“Recently it?s become increasingly clear that some of those partners haven?t followed through on their responsibility to help their customers through this shift. So, we?re stepping up on their behalf. We have made the decision to extend our deadline for the CDMA sunset by three months to March 31, 2022.”
Salty! T-Mobile goes on to accuse Dish of being generally terrible, and throws in a few references to the “digital divide” for good measure:
“There should be no more room for excuses. We have provided even more time and those partners can follow suit with the effort that is needed to ensure no one is left on the wrong side of the digital divide.”
Recall that it’s T-Mobile that spent millions of dollars lobbying the Trump administration (including spending more money at Trump’s hotel) to approve a $29 billion merger with Sprint that experts warned would reduce competition, ultimately raise consumer prices, and result in thousands of lost jobs. And recall that the Trump DOJ and FCC approved T-Mobile’s demands before even seeing the full impact analysis of the deal.
Then, to provide cover for the approval of a deal most folks didn’t think should have been approved due to competitive harm, Trumpland and T-Mobile came up with the idea of creating an entirely new wireless carrier out of Dish Network (a company with a long history of empty promises in wireless) and some twine. The deal was crafted by folks who like to wax poetic about how government shouldn’t meddle in business, yet now expect the U.S. government to mommy Dish and T-Mobile’s attempts to create an entirely new competitor. A plan you wouldn’t need if government had just blocked the deal and forced Sprint to find outside investment (Amazon, Google, Comcast, whoever).
But T-Mobile and Dish can’t even get along long enough to make it out of the first several years of the plan. And Dish continues to delay the launch of any meaningful wireless network. I still tend to think this ends with Dish stringing the FCC along for a few years on network build obligations until it can cash out of its vast spectrum holdings and head for the exits. Then, over time, investors will pressure the remaining three wireless providers (AT&T, T-Mobile, Verizon) to progressively exploit the dwindling competition and stop competing so intensely on price.
In most countries (Ireland, Canada, many European countries) the reduction of overall wireless competitors from four to three via merger and consolidation always ends badly. I tend to think Trumpland regulators and T-Mobile knew this from the outset, and this entire deal was crafted to help them pretend that wasn’t going to happen this time.