T-Mobile backtracks on California merger commitments after 12 weeks

It might have taken 653 days for the T-Mobile and Sprint merger to be approved in the US, but it has only taken 84 for the Magenta Army to ditch its promise to the Californian regulator.

In a filing with the California Public Utilities Commission, T-Mobile has proposed altering the wording in three separate areas. The amendments would effectively dilute any commitments made by the merged entity with regards to jobs and the deployment of a 5G network.

Although it is hardly unusual for corporations to wiggle out of reasonable commitments, perhaps this is one which we should have seen coming. After all, T-Mobile and Sprint didn’t even wait for approval from the California Public Utilities Commission before beginning the integration process.

In short, the new T-Mobile company would like three areas amended:

Few should be surprised a corporation is backtracking on commitments, but perhaps the speed of which the moonwalking started is the most worrying sign. After only twelve weeks, the documents were filed with the authorities, suggesting the team never had any intention of honouring the commitments.

As you might imagine, the Communications Workers of America (CWA), the union representing employees in the telecoms industry, is not pleased.

“Last week T-Mobile Chief Executive Mike Sievert was telling the public that the job cuts the company was making were just part of the transition process and that T-Mobile would create 5,000 new positions in retail and engineering in the next year,” said Communications Workers of America President Chris Shelton.

“Today, we find out that behind the scenes the company is telling California regulators that it can’t meet the requirement to create 1,000 jobs in the next three years. It turns out that the new T-Mobile is a lot like the old T-Mobile – all talk, no action.”

As the CWA points out, it made a filing to the FCC in 2018 estimating the merger would result in a net loss of jobs, not a gain. It also quoted T-Mobile executives from its most recent financial results which suggested it was successfully navigating the COVID-19 pandemic, being “uniquely positioned as the growth company in telecom and has already started laying the foundation for the future”. This contradicts the T-Mobile claim that it is not able to meet the California job commitment due to the coronavirus complications.

What is worth noting is that there have been commitments made elsewhere which are now looking on shaky ground:

We suspect there would have been other commitments made, there were more many more State Attorney Generals who joined an opposition lawsuit after all, though the details have not seen the light of day. Oregon, Connecticut, Maryland, Michigan and Texas are just a few to name.

One concession which will not go away is the creation of a fourth nationwide mobile network operator. The sale of Boost, Sprint’s prepaid brand, to Dish as well as a seven-year MVNO agreement and first refusal on the purchase of redundant mobile sites, still stands and looks as interesting as ever. With Dish closely monitoring developments in Japan with Rakuten, the prospect of a greenfield, OpenRAN, software-defined network in the US is becoming a real possibility.