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T-Mobile confirms store closings

T-Mobile confirmed it is closing an unspecified number of retail outlets.

“We are always optimizing our retail footprint as a normal course of business to ensure we are in the best position to support the thousands of communities we serve across the US," the operator wrote in a statement to Light Reading. "We recently notified some dealer stores that we will transition them to T-Mobile stores and we will also close a small number of redundant locations."

The company's confirmation follows reports from a number of sources, including the National Wireless Independent Dealer Association (NWIDA), FierceWireless, Wave7 Research and others that T-Mobile had closed up to 2,000 Metro by T-Mobile retail outlets. Metro by T-Mobile is the operator's brand for prepaid services.

Importantly, the action appears to be in response to an industry-wide decline in prepaid sales, as well as an ongoing slimming of Metro by T-Mobile. The overall decline in prepaid in the US was likely driven by economic improvements over the past few years, the widespread adoption of unlimited data plans and investors' preference for postpaid customers who typically spend more than prepaid customers.

However, that was all before COVID-19. If the pandemic sparks a widespread economic recession, as feared, some analysts have speculated that prepaid wireless services will grow in popularity among the newly unemployed. "As households get more price sensitive, we expect share to shift from postpaid to prepaid and within postpaid to lower priced carriers," wrote the Wall Street analysts at New Street Research on the effects of a possible economic recession.

One additional factor in T-Mobile's retail calculation is its merger with Sprint, which was contingent on the promise that T-Mobile wouldn't cut jobs as a result of the transaction. It's likely that the company's Metro by T-Mobile store closings won't affect that pledge because, first, the stores are mostly owned and staffed by third-party dealers. Further, T-Mobile officials acknowledged that the company likely would move to eliminate overlapping jobs and stores, but would replace any affected jobs with new ones – thus keeping its overall employee base at the same level.

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

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