T-Mobile/Sprint Throw More Grease on Merger Wheels With New Call Center Promises

Mike Dano
1/30/2019

Likely in an attempt to garner more support for their proposed transaction, Sprint and T-Mobile announced that, if they are allowed to merge, the combined company will build five new call centers each creating "an average of 1,000 new jobs."

The announcement comes just a few days before T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure testify at a joint hearing before the House Energy and Commerce Committee and the House Judiciary Committee, scheduled for February 13.

"A merger between T-Mobile and Sprint would combine two of the four largest wireless carriers and the carriers with the largest numbers of low-income customers. As the Committees with oversight of the Federal Communications Commission and Department of Justice, we must hold this hearing to examine the effects on important issues like jobs, costs to consumers, innovation and competition," stated several House committee leaders in announcing the move.

Indeed, it appears that -- with Democrats gaining control of the House from Republicans -- the proposed merger of Sprint and T-Mobile may well take on the role of political wedge. "This will be the first merger review hearing before the Energy and Commerce Committee in more than eight years -- the last time Democrats held the majority in the House of Representatives," the Democratic lawmakers stated in their announcement of the hearing.

Compounding the situation, five key Democrats on the Senate Commerce Committee also called on Republicans to hold hearings on the merger.

Legere and Claure last year testified before the Senate Judiciary Committee's Antitrust Subcommittee, but not the commerce committee and not in the House.

In discussing the details of their new call center pledge, Sprint and T-Mobile boasted the effort will include a call center in Sprint's Overland Park, Kansas, headquarters, and that it would "cumulatively create up to 5,600 additional American customer care jobs by 2021."

"We said the New T-Mobile will employ more people from day one than T-Mobile and Sprint would have separately -- and we mean it!" trumpeted T-Mobile's Legere in the release announcing the news, which also contained positive quotes from Kansas Senator Jerry Moran and Kansas Governor Laura Kelly.

Not surprisingly, the call centers will adhere to T-Mobile's new "team of experts" approach to customer care. (See T-Mobile Bucks Automation Trend in Customer Service With Latest 'Un-carrier' Move.)

The new announcement by Sprint and T-Mobile comes amid rising concerns that the operators ultimately won't be able to consummate their merger. (See Darkness Gathers Over T-Mobile/Sprint Merger.)

Specifically, the government shutdown essentially added a month to the FCC and Department of Justice review process. Perhaps more worrisome for Sprint and T-Mobile executives though are rising concerns around Chinese suppliers like Huawei and how they might affect 5G networks and national security. Indeed, T-Mobile's Tappy robot is at the center of the government's new case against Huawei. (See US Pursues Criminal Charges Against Huawei.)

Although Sprint and T-Mobile don't use Huawei equipment, their parent companies -- SoftBank and Deutsche Telekom, respectively -- do.

And aside from those security issues, opponents of the merger transaction continue to argue that the merger will ultimately result in a reduction of jobs. That's certainly the message that the Communication Workers of American union has been pushing at public hearings on the merger in California.

Meantime, others have been arguing against the economics of the merger, including how it might affect the wider wireless marketplace. That's what is mostly driving Dish Network's lengthy filings on the topic and the growing membership among opposition groups like 4Competition Coalition. Indeed, just yesterday Free Press held a press conference in Washington, D.C. to discuss "Mega Mergers and the War on the Poor."

It remains to be seen whether Sprint's Claure and T-Mobile's Legere will be able to weather such issues during a hearing that will likely be much more combative than last year's Senate hearing.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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