Peter Adderton (the founder and former chief executive officer of Boost Mobile) and Adam Wolf (the president of the National Wireless Independent Dealer Association) have released a joint statement expressing their disapproval of the proposed merger deal between major US wireless carriers T-Mobile and Sprint.
According to Adderton and Wolf, it is likely that the merger of the third and fourth biggest mobile operators in America (under the T-Mobile brand name) will negatively impact prepaid mobile users and wireless dealers in the United States. Interestingly, both men issued their joint statement just as ALL4PRICE.com launched in the Internet. This website was created in order to provide information to consumers about possible issues and concerns that might arise as a result of the proposed T-Mobile/Sprint merger.
Adderton and Wolf firmly believe that the union of the two national wireless service providers could create a monopoly in the US prepaid market. Right now, the three top prepaid brands in the country are Boost Mobile, MetroPCS, and Virgin Mobile, which enjoy a combined market share of close to 50 percent. Sprint happens to own Boost and Virgin, while MetroPCS is operated by T-Mobile. If they get lumped under one big merged brand (T-Mobile), the resulting prepaid monopoly could lead to unfair competition, eventually giving way to higher average prepaid pricing for customers, and possibly, even lower quality in service.
Moreover, Adderton also took the opportunity to point out how T-Mobile’s and Sprint’s executives were not transparent enough in addressing what will happen to the 30,000 independent wireless dealers across the nation after the merger becomes official. Both him and Wolf have also expressed their concerns regarding the future of more than 300 mobile virtual network operators (MVNOs) that are currently leasing network capacity from T-Mobile and Sprint. These smaller carriers are already contending with slim margins even with the wireless industry’s Big Four set-up. If that structure is reduced to a Big Three (and with no wholesale pricing protections established), MVNOs will probably encounter increases in wholesale pricing, which could hurt their revenues or worse, force them to shut down.
Adderton believes that his Boost Mobile will be directly impacted by the merger deal. According to him, the new T-Mobile business entity resulting from the deal will likely consolidate Boost with T-Mobile’s MetroPCS, presumably to save on costs. The ex-CEO has already requested the Federal Communications Commission (FCC) and the US Department of Justice (DOJ) to pressure T-Mobile and Sprint executives to sell off one or more of the prepaid brands as a condition for granting their approval of the proposed merger.