T-Mobile runs behind-the-scenes PR push to support
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[August 20, 2018]
By Sheila Dang
(Reuters) - T-Mobile US Inc <TMUS.O> is
asking smaller wireless operators that piggyback off its network to
issue public statements or even write newspaper editorials to help
persuade antitrust regulators to approve its proposed $26 billion
acquisition of Sprint Corp <S.N>.
The merger, under review by the Federal Communications Commission and
the Department of Justice, would shrink the wireless market to three big
players from four.
The FCC is collecting public comments and formal petitions to oppose the
deal until Aug. 27. Reuters previously reported that the U.S. Department
of Justice was soliciting opinions of the deal from so-called mobile
virtual network operators.
Opponents of the merger argue it could raise prices for the wireless
companies whose customers use T-Mobile and Sprint's networks.
One wireless operator that works with T-Mobile said it received an email
with suggestions on how to support the deal. The company declined to be
named because it has concerns about how it would be affected in the
The email from T-Mobile, seen by Reuters, suggested the company write an
op-ed supportive of the deal or submit a letter of support to
regulators. The email also offered talking points the company could use
during media interviews, such as how the merger between the No. 3 and 4
U.S. carriers would help the build-out of a 5G network.
John Marick, chief executive of Consumer Cellular, a wireless company
that sells inexpensive phone plans and devices to people over the age of
50, said he received an email from T-Mobile asking if he was willing to
submit a comment to the FCC. Consumer Cellular operates off of T-Mobile
and AT&T's network.
Marick said he has not yet submitted a comment and is not opposed to
doing so, adding he did not view the email as pressure to issue a
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A smartphones with
Sprint logo are seen in front of a screen projection of T-mobile
logo, in this picture illustration taken April 30, 2018.
REUTERS/Dado Ruvic/Illustration/File Photo
While it is not unheard of for companies pursuing mergers to ask vendors or
customers for support, there could be a small amount of coercion going on, given
that some of the smaller wireless companies have direct relationships with
T-Mobile, said James Cox, a Duke Law School professor who specializes in
corporate and securities law.
T-Mobile, which is majority-owned by Germany's Deutsche Telekom <DTEGn.DE>, and
Sprint, majority-owned by Japan's SoftBank Group <9984.T>, declined to comment.
Both companies have previously said they expect the deal to win regulatory
Consumer Cellular and other smaller wireless companies operate by purchasing
access to the four major U.S. carriers' networks at wholesale rates, and often
market their phone plans to specific users, such as low-income groups or
Earlier this month, a source told Reuters that U.S. antitrust enforcers are in
the early stages of reviewing the merger and have reached no conclusions on how
many wireless carriers the country needs.
The Obama administration had previously taken actions to keep four wireless
carriers in the United States to ensure enough competition.
T-Mobile and Sprint have argued, however, they need to combine to more quickly
build a 5G network, as countries like China and South Korea are currently ahead
of the United States in 5G investment.
(Reporting by Sheila Dang)
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