T-Mobile's post-merger pricing commitments may have been undermined by Sprint exec
The trial of the century as far as the US wireless industry is concerned has kicked off on Monday, and right from the start, the states opposing a $26.5 billion merger between T-Mobile and Sprint seem to have poked a few big holes in the two carriers' defense strategy.
In addition to questioning the reliability of Dish Chairman Charlie Ergen, who is supposed to create a viable alternative for Sprint capable of maintaining today's healthy market competition after sitting on a whole bunch of unused spectrum for many years, the 13 state AGs and Attorney General for the District of Columbia also presented evidence on the first court date that suggests consumers could end up paying more for their cellular service if the industry switches from a "big four" to a big three setup.
Namely, it appears that Roger Solé, Sprint's Chief Marketing Officer since December 2015, sent then-CEO Marcelo Claure a text message at some point in 2017 anticipating an increase of $5 a month in average revenue per subscriber if a merger were to go through. Solé also believed rivals Verizon and AT&T could benefit from a "consolidated market" in a similar way without spending a dime.
Naturally, the "Now Network's" CMO, who was asked to testify on the matter, was quick to downplay the seriousness of his text, which allegedly went unanswered by Claure, who is now the CEO of Sprint parent company SoftBank, as well as Sprint and WeWork's executive chairman. Solé highlighted he was merely venturing a guess about what could eventually happen "very far down the road."
That's not exactly what T-Mobile has been promising these past 20 months or so. On the official "New T-Mobile" website, the union between the nation's third and fourth-largest wireless service providers is billed as beneficial for "ALL Americans", opening "massive wireless highways and lowering prices." At the same time, Magenta's list of specific commitments is headlined by a vow to offer customers "the same or better rate plans as T-Mobile and Sprint offer today for three years."
Roger Solé seems to argue his prediction extends beyond this three-year period, but it remains to be seen if the judge presiding over the highly publicized Manhattan federal trial expected to wrap up in just a couple of weeks will be as happy with these somewhat vague promises and conflicting statements as the Department of Justice and Federal Communications Commission.
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