Adam Wolf, President of the National Wireless Independent Dealer Association (NWIDA), spoke out against T-Mobile and Sprint’s proposed merger on Thursday, having done so as part of an explicitly outlined cooperation with Peter Adderton, Boost Mobile founder who already argued against the $26.5 billion tie-up last week. In a joint release, the duo asserted Sprint and T-Mobile’s consolidation will lead to “widespread devastation throughout the wireless ecosystem.” The industry veterans are pointing to the prepaid market segment as the biggest issue of the proposed merger, with that space already being dominated by T-Mobile and Sprint who would have no incentive not to raise prices after combining, hence negatively impacting the poorest Americans who statistically use prepaid services the most.
Besides rising prices, the prepaid market would likely suffer from service quality degradation following the tie-up, the pair argues. Approximately 30,000 independent wireless dealers in the country are also threatened with the merger, with the uncertainty surrounding their businesses growing ever greater due to a general “lack of transparency” from T-Mobile and Sprint’s executives, Mr. Adderton argues. Around 300 mobile virtual network operators in the United States are also threatened by the prospect of the merger which would provide them with even fewer choices when it comes to deciding on whose infrastructure to utilize, hence likely raising wholesale prices and their operating costs that they would pass on to consumers. With the vast majority of MVNOs offering prepaid packages, that’s another manner in which T-Mobile and Sprint would negatively affect the country’s poorest consumers, according to the veteran executives.
Mr. Adderton is advocating for a divestment at least one of Boost Mobile and MetroPCS before any tie-up is approved so that some semblance of competition remains in the prepaid market. The Boost Mobile founder urged both the Department of Justice and the Federal Communications Commission to intervene in the matter and ask for such concessions from the third- and fourth-largest wireless carrier in the country. Approximately 50 million Americans use prepaid mobile services on a monthly basis, according to recent estimates. Outside of the prepaid segment, the merger may actually lower the cost per a gigabyte of wireless data, some analysts believe.