T-Mobile and Sprint’s merger has been put in the spotlight for a few weeks now, especially since both companies reached an agreement. While it seems that many are looking forward to the merger getting approved, there are some who are strongly against it. One of those is Peter Adderton, the founder and former CEO of Boost Mobile USA.
Even though Boost Mobile is currently owned by Sprint, Adderton still runs the Australia counterpart of the carrier from his Los Angeles residence. The CEO believes that Boost and T-Mobile’s MetroPCS unit should be spun off before the merger is finalized.
Adderton’s concern is extended to the 30 million + prepaid wireless customers of the carrier who will be consolidated under the new T-Mobile brand. With both companies aggressively competing with each other in the prepaid market, it will be a different story once the two brands become one. Adderton believes that MetroPCS will no longer compete with Boost’s offers since they own the same customers. And with no one left to entice, how will they keep afloat?
“What happens when you have five branded stores in a strip mall? Well, you don’t need five.” – Peter Adderton.
In addition to his concerns about the prepaid industry, Adderton is worried about the future of MVNOs. Once the two companies become a dominant brand in the prepaid market, they will “have a significant incentive to restrict network access to competing MVNOs.” If the merger includes both Boost Mobile and MetroPCS, Adderton believes it will be bad for “the overall competitive landscape, bad for the prepaid market, bad for our country’s MVNOs, and bad for the economy.”
Right now, T-Mobile and Sprint still have to convince the FCC and the DOJ for the merger to be made final. Adderton plans to share his concerns with lawmakers and regulators.
Meanwhile, he is still open to speaking with John Legere and Marcelo Claure on how they both plan to manage the price war between Boost and MetroPCS and how they intend to maintain the competition between prepaid and postpaid today.
No plans for a face-to-face debate have been set as of this writing.
Source: USA Today