Company slams T-Mobile’s plan to shut down Sprint’s legacy network in early 2022.
It wasn’t too long ago when DISH Network played a key role in helping T-Mobile finalize its $26 billion merger with Sprint. In order to get regulator approval, T-Mobile had to sell Boost Mobile to a competitor. DISH partly paved T-Mobile’s path to merger approval when it agreed to purchase Boost for $1.4 billion. The transaction appeared to be a win for all involved; T-Mobile and Sprint got their merger, DISH took a big step towards becoming a wireless carrier and regulators felt like there was enough industry competitive balance to approve the deal.
It’s amazing how quickly things can change.
Fast-forward to a year later and it looks like the T-Mobile and DISH relationship has soured a bit. DISH recently wrote a letter to the Federal Communications Commission (FCC) that accused T-Mobile of anti-competitive behavior, according to Engadget and multiple news outlets. DISH pointed out several issues in the letter to the FCC, but perhaps the biggest is T-Mobile’s plans to shutdown Sprint’s Code Division Multiple Access (CDMA) network. DISH claimed that T-Mobile’s current timeline to shutter the network would hurt its 9 million wireless customers.
DISH can’t meet T-Mobile’s timeline
Right now, January 1, 2022 is T-Mobile’s target date to shut down Sprint’s legacy network. The problem is that’s how DISH’s 9 million wireless customers are getting their service until it builds its own 5G network. If T-Mobile’s timeline remains, DISH has less than a year to move its customers to new devices. The company says that’s not enough time between the numbers involved and a lack of chips and devices.
“A forced migration of this scale under this accelerated time frame is simply not possible and will leave potentially millions of Boost subscribers disenfranchised and without cell service come January 1st, 2022,” DISH said in its letter to the FCC.
DISH thought it would have between three and five years of access to the CDMA part of Sprint’s network, Axios reports. DISH noted that Verizon delayed its CDMA shutdown several times over the years. Plus, when the shutdown occurs, it will impact less than 1% of its customer base. Verizon’s CDMA shutdown is also expected to happen after T-Mobile’s.
“A majority of our 9 million Boost subscribers have devices that rely on Sprint’s CDMA network and will be harmed if T-Mobile prematurely shuts down that network,” Stephen Stokols, the head of Boost Mobile, said in a statement to Engadget. “(T-Mobile President and CEO Mike) Sievert’s statement that 90 percent of those subscribers will have a T-Mobile device by year’s end reinforces our view that they are planning to directly attack Boost customers with an accelerated shutdown in order to churn customers directly to T-Mobile.
“As discussed during our conference call, we believe this is highly anti-competitive. We hope that T-Mobile reconsiders its decision to shut down the CDMA network prematurely so 100 percent of Boost subscribers will not be impacted and DISH can continue providing consumers with competitive choices.”
T-Mobile however, believes it’s not doing anything wrong, according to The Verge. In its view, T-Mobile is just sticking to the agreement it made with DISH last October.
“Everything we are doing here is exactly consistent with the agreement that DISH made with us a year and a half ago, and we have been very proactive and transparent about the timing for this transition with all of our MVNOs, including DISH,” T-Mobile said in a statement. “We gave DISH notice in October 2020 for a January 1st 2022 transition – far more than the required six-month contractual agreement.
“Our agreement with DISH is also clear that they are responsible for migrating Boost customers, just as we are responsible for migrating Sprint customers, and we are confident that DISH is already making plans to take good care of their impacted customers prior to the transition date. Given the advance notice that they received, just a small percentage of Boost customers should need to upgrade their handsets by the end of this year, and typically those customers would be supported with incentives and promotions to get their handsets upgraded.”
Deutsche Telekom seeks direct control of T-Mobile
In other T-Mobile news, Deutsche Telekom CEO Tim Hoettges recently told shareholders the company expects to gain direct ownership over the carrier, according to Yahoo Finance. Hoettges said the capital return to shareholders by its U.S. business would fund the move. The executive also noted that he expected T-Mobile to return up to $60 billion to shareholders between 2023 and 2025. Deutsche Telekom’s share of the proceeds would allow it to increase its holding in T-Mobile from 43% to more than 50%.
“It’s harvest time,” Hoettges said during the annual shareholders meeting.
Hoettges said Deutsche Telekom’s initial task to make the deal work would be to decrease group debts of $140 billion. The debts occurred when the T-Mobile-Sprint merger closed last year.
Joe Dyton can be reached at firstname.lastname@example.org.