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Former Boost Mobile USA CEO Has Some Concerns about the T-Mobile-Sprint Merger

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T-Mobile and Sprint's merger has been put in the spotlight for a few weeks now, especially since both companies reached an agreement. While it seems that many are looking forward to the merger getting approved, there are some who are strongly against it. One of those is Peter Adderton, the founder and former CEO of Boost Mobile USA.

Even though Boost Mobile is currently owned by Sprint, Adderton still runs the Australia counterpart of the carrier from his Los Angeles residence. The CEO believes that Boost and T-Mobile's MetroPCS unit should be spun off before the merger is finalized.

Adderton's concern is extended to the 30 million + prepaid wireless customers of the carrier who will be consolidated under the new T-Mobile brand. With both companies aggressively competing with each other in the prepaid market, it will be a different story once the two brands become one. Adderton believes that MetroPCS will no longer compete with Boost's offers since they own the same customers. And with no one left to entice, how will they keep afloat?

"What happens when you have five branded stores in a strip mall? Well, you don't need five." - Peter Adderton. 

In addition to his concerns about the prepaid industry, Adderton is worried about the future of MVNOs. Once the two companies become a dominant brand in the prepaid market, they will "have a significant incentive to restrict network access to competing MVNOs." If the merger includes both Boost Mobile and MetroPCS, Adderton believes it will be bad for "the overall competitive landscape, bad for the prepaid market, bad for our country's MVNOs, and bad for the economy." 

Right now, T-Mobile and Sprint still have to convince the FCC and the DOJ for the merger to be made final. Adderton plans to share his concerns with lawmakers and regulators.

Meanwhile, he is still open to speaking with John Legere and Marcelo Claure on how they both plan to manage the price war between Boost and MetroPCS and how they intend to maintain the competition between prepaid and postpaid today.


No plans for a face-to-face debate have been set as of this writing.



Source: USA Today

18 comments:

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  1. this guy is running boost Mobile "from his los Angeles residence"? no wonder boost is so crappy!

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    1. Nothing wrong with working from home. Also Adderton is managing Boost Australia, not Boost USA, which is 100% Sprint owned and operated.

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  2. This guy is absolutely right. There's nothing good for consumers about this merger.

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  3. I am certainly not for this merger. We don't need less competition. As it is, the carriers pretty much poach customers off of one another without any real competition.

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  4. Or the dealers, I own a few boost stores and there not the new style 4.0, I have been hearing rumors that tmobile will only keep the new 4.0 style stores, So I did some checking and we have 2500 old style stores across the country, so dealers like me will lose our business's. Have worked hard these past few years to make a quality brand and loyal customer base. Now it could all be lost, So sad

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    1. I'm sure the merger will benefit you. Unlike you most owners gouged the customer. Countless promotion offers were ignored. Catch 22s and such. Usually I'm anti merger but both companies already had low price points before competing. Good customers and owners won't be denied. If we are, we simply take our business elsewhere. MVNO companies will always be making deals in order to capitalize on the low end price point market share.

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    2. Boost isn't nevessanece crappy as much as it's for a particular consumer. Most likely you are better served by TMO prepaid. There are levels to prepaid. You might benefit from the Verizon or TMO prepaid offering. Personally Boost has been a surprisingly great prepaid offering for me personally. But I understand it may not provide the premium others may require. However Boost is meant to be better than Ultra, not Verizon.

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    3. Spinning off Boost guarantees it's elimination. Who is buying Boost or Virgin? Metro might get decent offers. No other prepaid MVNO companies will get great spin off offers. I hate the idea of Metro and Boost together, but spinning them off kills the prepaid market for the low end price point consumer.

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    4. Restricting competing MVNO companies is unlikely because the parent company sells network access to MVNOs. Unbeknownst to some, most MVNOs already are numerous and occupy space on the major carriers. Look at the profiles on this site for more detailed information about majors and MVNOs.

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    5. To Unknown. You have EVERY right to be worried. The word on Boost is that there are big shakeups going on at the Corporate level and that a big number of lesser performing dealers will be cut. There is a massacre of Boost mobile exclusive stores coming over the next year whether there is a merger or not.

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  5. Adderton wants to buy back Boost to give low income customers a fighting chance ansa viable option for prepaid. If he can bring 3 gigs/64 gigs handsets to the $150 price point and give that to the $25 a month service, then that is a true challenge offered by Boost spinning off. It's unlikely. Prepaid seems relegated to low memory phones from the Huawei ZTE types.if Adderton is serious about that investment group doing that he should be commended. Again, it's unlikely.

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  6. When the sale goes through there will be conditions, and probably some spectrum sales. Mandating MVNO agreements doesn't look necessary to me; US carriers want extra customers to fill up their network capacity, unlike Canada. Competition from AT&T and Verizon and their MVNOs won't go away. But there could be a requirement to treat MVNOs fairly in the sale approval. Adderton probably has some business plans that would be affected by the merger and is just trying to preserve his options.

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    1. All the FCC/FTC has to do to secure competition in the marketplace is to mandate 25% of any cell phone Co. business come from wholesale, with juicy penalties for every percentage
      missed, than I think they can go ahead and approve the merger.

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  7. Spinning off Boost and Metro wont work as they will be like any other MVNO and will no longer be able to offer a half way decent unlimited data plan that they offer now. Also by merging into one company will most likely have raising costs as there will be less competition. As it is now having two separate companies is better for the consumer in terms of monthly cost.

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  8. "Adderton is worried about the future of MVNOs. Once the two companies become a dominant brand in the prepaid market, they will "have a significant incentive to restrict network access to competing MVNOs." If the merger includes both Boost Mobile and MetroPCS, Adderton believes it will be bad for "the overall competitive landscape, bad for the prepaid market, bad for our country's MVNOs, and bad for the economy."

    T-Mobile and Sprint are already the dominant brands in the prepaid market, and they still have the largest wholesale businesses.

    Post merger they have no "substantial incentive" to restrict MVNOs, which serve different customers than the ones attracted to branded prepaid plans. The 5G network will have a huge amount of excess capacity compared to LTE, so the incentive will be to foster more MVNOs, not less, in order to help monetize the huge cost of 5G deployment.

    Bad, bad, bad....NOT. Reduction in major carrier choice does not have to mean reduced market competition. T-Mobile and Sprint make a convincing case that they will have the resources via operational and investment savings and the first deployed 5G mobile network to be an even stronger competitor, and that prices will continue to go down.
    Verizon and AT&T prices are still too high.

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  9. Credit - Phonescoop.com / Boost Founder Wants to See Boost/MetroPCS Divested If Sprint/T-Mobile Merger Goes Through https://www.phonescoop.com/articles/article.php?a=20675 also credit - https://www.fiercewireless.com/wireless/boost-founder-angles-for-divestitures-from-sprint-t-mobile-merger

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  10. A new survey from market research and consulting firm HarrisX found that 22% of Americans support a merger between Sprint and T-Mobile, while 59% said they needed more information to decide on the topic.

    After HarrisX presented a list of arguments for and against the merger that have been used publicly, fully 56% of respondents came out in favor of the deal. 44% opposed.

    Adderton has a conflict of interest. He wants to buy Boost and maybe MetroPCS, according to other articles.

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  11. T-Mobile and Sprint got some good news from the head of the Justice Dept Anti-Trust Division. He says there is no "magic number" for major players in a particular industry.
    Makan Delrahim said that eliminating a competitor would not necessarily spell the end of the long-sought merger — a reversal of the Obama administration's position that supported the presence of four carriers.

    "I don’t think there’s any magical number that I’m smart enough to glean about any single market," Delrahim said.

    Instead, he said the review would consider antitrust law and the economics of the wireless market.

    S: Fierce Wireless

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