Report: DOJ investigating how the T-Mobile-Sprint merger affects wholesale pricing for MVNOs

Report: DOJ investigating how the T-Mobile-Sprint merger affects wholesale pricing for MVNOs
Multiple sources are telling Reuters today that the Justice Department does have some concerns about the $26 billion Sprint-T-Mobile merger. The DOJ is concerned about how the deal might affect smaller carriers. The focus is on the pre-paid market where T-Mobile has a 36% share through its MetroPCS brand. Sprint controls 18% of this market as it owns both Boost Mobile and Virgin Mobile. The merger would result in a single company owning 54% of the pre-paid landscape.

David Glickman, CEO of pre-paid brands Ultra Mobile and Mint Mobile, says that the Justice Department is looking to talk to him about the T-Mobile-Sprint deal, but does not know the specific topic on the agenda. The DOJ might be concerned about keeping pre-paid carriers in business since they are usually more affordable, and while they no longer carry a stigma like they used to, 83% of Boost's customers earn less than $75,000 a year. In that tax bracket, T-Mobile is the most popular wireless provider in the states according to Kagan, S&P Global Market Intelligence data.

According to the report, Justice Department investigators are speaking to smaller MVNOs that pay the major carriers for access to their networks. The feds want to know what impact the merger would have on the prices they pay to connect with LTE networks belonging to Verizon, AT&T, T-Mobile and Sprint. These virtual networks are too small to build out their own networks, although some of them are owned by bigger companies like Google (Project Fi) and Comcast (Xfinity Mobile).

Boost Mobile USA founder Peter Adderton, who is no longer involved in the U.S. end of the business, says that it is encouraging to see the Justice Department investigating how the merger will affect consumers.


T-Mobile and Sprint are expected to argue that their deal is necessary to help build out 5G networks in the U.S.

source: Reuters

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3 Comments

1. Dr.Phil

Posts: 2391; Member since: Feb 14, 2011

If it were up to me, I would force Sprint and T-Mobile to hand over some of their spectrum to Boost and MetroPCS. Not so that those two could build their own network, but instead so they can always use it as a bargaining chip to make sure prices for using their two networks will always be low. You want access to 2500 MHz or 600 MHz spectrum? Then you need to give us access to your network at this price. Then it becomes a mutual benefit where the big carriers will have their spectrum and the smaller carriers will have their access at the right prices.

2. kennybenny

Posts: 214; Member since: Apr 10, 2017

Sorry to burst your bubble, but MetroPCS and Boost mobile are subsidiaries of T-Mobile and Sprint!!!

3. Dr.Phil

Posts: 2391; Member since: Feb 14, 2011

Perhaps you haven’t read up on the latest news or even read what this article has been referring to, but there is talk about a proposal to have Sprint and T-Mobile spin off one or more of the prepaid brands (Metro PCS or Boost Mobile) in order to keep the prepaid market competitive. You see, Metro PCS and Boost Mobile makeup the largest percentage of prepaid plans. So while the merger of Sprint and T-Mobile create a network that would still not be the largest carrier, a merger of their prepaid brands would be the largest by a lot. That is why I said what I said. But hey, go ahead and score some points on seemingly obvious information that even a nobody on the street is aware of.

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