TR Daily CWA Asks State AGs to Probe T-Mobile-Sprint Deal
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Monday, September 17, 2018

CWA Asks State AGs to Probe T-Mobile-Sprint Deal

The Communications Workers of America has asked state attorneys general to closely probe T-Mobile US, Inc.’s proposed acquisition of Sprint Corp., saying it would result in the loss of tens of thousands of jobs, increase concentration, and “raises serious national security concerns regarding possible integration of Chinese government-owned Huawei and ZTE equipment in the Sprint and T-Mobile networks.”

A news release on the letter from CWA President Christopher Shelton stressed that CWA’s “analysis finds that the merger would result in the loss of more than 28,000 jobs across the country, contrary to the unsubstantiated claims of job creation from the merging parties. Approximately 24,000 job cuts will come from the elimination of duplicate retail stores and another 4,500 will be cut due to duplicate headquarters functions. Furthermore, the proposed horizontal merger will eliminate market competition and increase concentration in the national and local markets for mobile telephony, broadband services, and prepaid wireless services. As a result, consumers will see increased prices and less innovation.”

The news release also noted that in his letter, which was dated Sept. 10 but released today, Mr. Shelton “points out that T-Mobile and Sprint’s claims that the deal will accelerate the move to 5G wireless actually contradicts their statements to their own shareholders. Just last month, T-Mobile told Wall Street that ‘our advancements in network technology and our spectrum resources ensure we can continue to increase the capabilities of our network as the industry moves toward 5G.’ There is also zero evidence that rural American[s] will benefit from the merger.”

In addition, CWA “also raises national security concerns regarding the possible integration of Chinese government-owned Huawei and ZTE equipment in the T-Mobile and Sprint networks. Sprint, and its majority owner SoftBank, have used Huawei equipment in its network for years, and in 2012 Sprint was ordered by the Committee on Foreign Investment in the US to remove Huawei equipment from its network. However, three years later, Sprint admitted that it still had Huawei equipment in the network. Since 2015, SoftBank has partnered with the two Chinese companies to develop and deploy 5G wireless technologies in Japan. In a time when cyber-security is of utmost importance, this aspect of the merger should raise flags and certainly warrants a thorough inquiry to determine the nature of foreign involvement.”

“In sum, the proposed T-Mobile/Sprint merger poses substantial harm to consumers and workers, with no countervailing benefits,” Mr. Shelton said. “These concerns compel a thorough investigation and action to protect wireless workers’ interest in good jobs and consumers’ interest in a vibrant, competitive wireless market.” —Paul Kirby, [email protected]

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