Sprint and T-Mobile Execs Duck the Real Questions on Prepaid and MVNOs While Casting False Aspersions at Peter Adderton in Senate Subcommittee Hearing on Proposed Sprint/T-Mobile Merger

Adderton challenges John Legere to a live debate on the issues

LOS ANGELES, June 28, 2018 (GLOBE NEWSWIRE) -- Peter Adderton, founder and former CEO of Boost Mobile USA, today is offering his initial reaction to yesterday’s hearing by the U.S. Senate Subcommittee on Antitrust, Competition Policy, and Consumer Rights regarding the proposed merger of Sprint and T-Mobile. The hearing was chaired by Sens. Mike Lee (R-UT) and Amy Klobuchar (D-MN), and included sworn testimony from Sprint Executive Chairman Marcelo Claure, T-Mobile CEO John Legere and four expert witnesses.

“Over the past six weeks we have been working aggressively to raise awareness in Washington D.C. and across the country about three significant concerns we see with this merger as proposed, and based on the questions asked in the hearing, I am pleased to say that the message was received on The Hill,” stated Adderton. “The problem is that the Sprint and T-Mobile executives don’t seem to have any answers, or they’re just hiding them. Our concerns center around the impact the merger will have on our 30,000 independent wireless dealers, which could be devastating, the need for multi-year protections for our nation’s 300 MVNOs who buy wholesale services from one or both these carriers, and the monopolistic impact this transaction will have on the prepaid wireless segment without some level of divestiture of the New T-Mobile’s three dominant prepaid brands.”

On June 26, the Communications Workers of America (CWA), issued a press release detailing their analysis of the projected impact of the merger on telecom workers across the country, which they characterized as “Massive job loss of 30,000 jobs.” In the release, the CWA states, “According to CWA analysis, the majority of these potential job losses, around 26,000, would occur as a result of store closures spread throughout the country. CWA estimates that store closures would include 2,300 overlapping Sprint/T-Mobile stores and 2,750 overlapping Boost (Sprint) and MetroPCS (T-Mobile) prepaid wireless stores, including corporate and authorized dealer retail locations.”

“In his sworn testimony, Mr. Legere pledged that the merger would result in opening 600 new retail stores and would create 11,000 incremental new jobs by 2024, and yet the CWA projects the merger will result in 5,000 store closures and the elimination of 30,000 jobs,” continued Adderton. “This is why I am calling for clarity on this issue. In lower income, urban neighborhoods there is a Boost or MetroPCS prepaid store on just about every corner. Does anyone realistically think these guys are going to rebrand all of these stores as the New T-Mobile and then open another 600 just for good measure? In their recent 700-page FCC filing, the New T-Mobile had absolutely nothing to say about the prepaid segment and yet today it’s all sunshine and unicorns. I’m not buying it.”

In his sworn testimony, Mr. Legere stated, “We have not suggested any change per se in the use of the MetroPCS, Boost or Virgin Mobile brands. They serve very different purposes and different groups of customers, and so far, we see that being a less likely store rationalization.” “I find it laughable and frankly disingenuous that John would swear under oath that MetroPCS and Boost Mobile serve very different purposes and different demographics when their stores are oftentimes right across the street from each other,” stated Adderton. “Those two brands compete directly with each other for the same customer, and their promos and advertising make that infinitely clear. I just typed in ‘Boost Mobile vs. MetroPCS’ in Google and got 10 million hits. What does that tell you?”

“On another note, it’s clear that my ongoing campaign to raise awareness on these issues has struck a sensitive nerve with Mr. Legere, and I took some of his sworn testimony as disparaging to me personally,” stated Adderton. “While he didn’t mention me by name, everyone in the room knew John was talking about me when he stated that a certain individual has an ulterior motive in our campaign, and that is to acquire Boost Mobile. He further stated that that individual already has a formal relationship with a private equity firm to finance the deal.”

“As the founder of Boost Mobile with the same passion I had 17 years ago when I created Boost to serve the low income and credit-challenged consumers, I’ve been very clear that one or more of the New T-Mobile’s three dominant prepaid brands must be divested prior to the merger to maintain a healthy competitive prepaid market,” said Adderton. “I’ve also been clear that I would consider stepping in and taking back the  Boost Mobile brand if there’s a deal to be made. I feel that strongly about this issue. There are some 30 million lower income, minority and credit-challenged Americans affected by this transaction who need an affordable, high quality prepaid service, and I’m ready to step in and provide that. Moreover, it is clear from T-Mobile’s determination to hide their intentions about this segment of the market that these customers are probably not going to be protected, and may very well lose their lifeline to the online world without a divestiture. I am funding this campaign out of my own pocket and have no private equity firm behind me. None. On that note, I am hereby challenging Mr. Legere to a live debate on these issues, any time, any place. I think your customers and your employees deserve some straight answers.”

Susan Donahue
ph: (646) 454-9378