Dish will reportedly drop 2.5 million low income customers after buying Boost Mobile

Dish will reportedly drop 2.5 million low income customers after buying Boost Mobile
When the T-Mobile-Sprint merger was first announced on April 29, 2018, it appeared that getting the U.S. Justice Department to agree to the transaction was going to be a huge issue. After all, the number of major U.S. carriers was going to be reduced by 25% and in the eyes of the DOJ, that means less competition and higher prices. However, an ingenious plan was crafted that would turn Dish Network into the "fourth nationwide facilities-based network competitor," replacing Sprint.

Once T-Mobile closes on its transaction with Sprint, a second deal will see Dish Network purchase all of Sprint's prepaid businesses (including Boost Mobile and Virgin Mobile) for $5 billion. The deal includes 14MHz of Sprint's 800MHz spectrum, 400 employees, 7,500 stores and 9.3 million customers in 50 states. Dish will sign a seven-year MVNO contract with T-Mobile so that it can start selling wireless service while it builds out its standalone 5G network.

Boost Mobile founder says that Dish will throttle prepaid service on purpose in order to get unprofitable customers to leave


But if the founder of Boost Mobile, Peter Adderton, is correct, Dish will end up looking to cut costs by jettisoning as many as 2.5 million prepaid customers. According to Fox Business News, these would be wireless consumers that Dish doesn't believe it could make any money on. Adderton founded Boost in 2000 and sold it to Nextel in 2003. Two years later, Sprint gobbled up Nextel picking up Boost Mobile in the process. Adderton believes that if Dish does complete its transaction with Sprint, it will need to cut costs so that it can pay for the build-out of its 5G network. He says that Dish will throttle the data speeds of certain prepaid customers in the hope that they will decide to take their business elsewhere.

The only thing that is holding up the T-Mobile-Sprint merger is a lawsuit filed by 15 state attorneys general and the attorney general of Washington D.C. that seeks to block the merger. Dish, concerned that Adderton's comments could make it appear as though the company will leave low-income consumers out in the cold, quickly responded to his comments. "DISH plans to aggressively grow the Boost business from day one," a company spokesman said. "Upon close, we are eager to provide existing and future Boost consumers with our award-winning customer service. Any speculation to the contrary is false and is reflective of some other agenda." Adderton responded by stating that Boost consumers deserve more than soundbites. The man who started Boost pointed out that the agreements made by T-Mobile and Sprint in order to get FCC and DOJ approval for their merger don't preclude Dish from dropping the quality of the prepaid services it will purchase from Sprint to get unprofitable customers to drop the service. According to Dish's own release from last July, the satellite content provider has to cover 70% of the U.S. with its 5G signals by June 14th, 2023. If that goal is not reached in time, Dish will have to make a voluntary contribution to the U.S. Treasury in the amount of $2.2 billion.


The lawsuit that is holding up the T-Mobile-Sprint merger will go to trial starting on December 9th. The plaintiffs are concerned that a combined T-Mobile-Sprint will raise prices and prevent low income Americans from accessing the internet. T-Mobile addressed these issues this morning when it announced that it would launch nationwide 5G service in the U.S. on  December 6th. It also announced a low-cost plan called T-Mobile Connect which offers unlimited talk, text and 2GB of data for $15 a month. The plan will remain priced at that level for five years with the monthly data cap rising by 500MB every year. So after the first year, subscribers will get 2.5GB of data each month during the next year, 3GB per month the next year and so on.

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17 Comments

1. MsPooks

Posts: 206; Member since: Jul 08, 2019

If they're losing money on certain subscribers, why should they hang on to them? Who runs a business to lose money?

2. semipro1337

Posts: 114; Member since: Oct 01, 2012

Those customers are paying for their services, and how exactly is a customer legally going to be dismissed for this? The prepaid market is supposed to be there to help low income people, it's not like the infrastructure isn't handling them now. I'm not sure how forcing paying customers to go elsewhere is going to save the company money. Sounds like they are going to rise their prices a lot, which means why would anyone switch to them or even keep service with what will essentially still be the sprint network? You don't cut customers, this just made dish look greedy and it might make even more states jump into block this. Good job dish, worthless tv service and worthless company.

16. UncommonSense

Posts: 3; Member since: 3 days ago

You mean like what At&t and Verizon already does?

9. therealunforgiven

Posts: 3; Member since: Apr 24, 2019

If they're already coming out of the gate doing stuff like this. Think what it will be when they get up and running. You know how good companies when they get big turn bad. To me that means when dish gets it all going it's going to be bad. They only want low income people to get the business going. Like walmart now they took layaway and all kinds of things. This is going come back and bite dish....

17. UncommonSense

Posts: 3; Member since: 3 days ago

No where in writing does it say that boost will do anything like that. Seriously, that is just speculation.

14. warrenellis93

Posts: 556; Member since: Jul 21, 2011

i agree with you mspooks, i have been with boost for about 10 years and enjoy the cheap data, but call quality sucks and i always feel weird being on a carrier that is owned by a company loosing money, i have a back up line with verizon prepaid and its way better call quality and data speeds and coverage.

3. Atrixboyyy

Posts: 613; Member since: Nov 03, 2011

I'm a little confused. Can't you sue if you're not getting the advertised speed or close to it? I hear throttling and I'm thinking 2g speeds...

4. bbycrts

Posts: 32; Member since: Nov 05, 2018

After reading this article I don't see any solid evidence that this is Dish's plan - just sour grapes from the founder of Boost in an attempt to throw more water on the merger. Shouldn't the headline read "allegedly" instead of "reportedly?"

5. Alan01

Posts: 638; Member since: Mar 21, 2012

Thanks for the comment. "Reportedly" and "allegedly" are synonyms. And while Peter Adderton might have sour grapes, the video from Fox Business News suggests that he has heard this from sources he has. Either way, reportedly or allegedly fits. Regards, Alan

11. battlebro85

Posts: 1; Member since: 4 days ago

While they are synonyms, that doesn't mean you can just replace one for the other...That's not how it works. Reportedly would lead the reader to believe that it's from a source at Dish. Allegedly would lead the reader to believe the founder of Boost is pointing out what he thinks Dish will do (or may have to do). Either way, the title is misleading. Quote anything from Dish or Sprint that says they are going to drop Boost customers and then reportedly fits.

12. bbycrts

Posts: 32; Member since: Nov 05, 2018

There is no proof offered for the allegations, though the headline, with the use of the word "reportedly" implies that there is. Synonyms don't mean the words have the same exact meaning; your choice of word is misleading, especially when many will read the headlines only and take them as the gospel truth. Sloppy journalism, indeed.

13. bbycrts

Posts: 32; Member since: Nov 05, 2018

And just because Fox Business News was willing to offer sloppy reporting doesn't mean you should lean on their sloppiness as your justification to do the same.

6. rossy

Posts: 46; Member since: Aug 23, 2013

This is not news but speculation based on annonimous sources. I am sick of the stories like this. I guess we are running out of hard technology news stories.

18. UncommonSense

Posts: 3; Member since: 3 days ago

A lot of reporters do that now in order to get traffic.

8. AndrewG1906

Posts: 1; Member since: 4 days ago

This is sloppy journalism at best and an allegation without any proof! The article never mentioned Peter Adderton, the founder of Boost Mobile failed in his attempt to buy back Boost Mobile from Sprint (FierceWireless, June 17, 2019), and his vocal opposition has been nothing more than sour grapes, and an attempt to derail the sale. As someone mentioned earlier, the word alleged really applies to this title.

10. Cat97

Posts: 1969; Member since: Mar 02, 2017

How would you "drop low-income customers" ?

15. Ripley80

Posts: 1; Member since: 3 days ago

I believe that this is already going on. I have been a Boost Mobile customer since 2007 and I have been trying to get people to believe me that the LTE has gotten considerably worse in the last year. I have had hoped that this is just Sprint sabotaging a limb they are in the process of amputating, and things would improve after the sale. Now I am worried and considering my legal options...

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