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T-Mobile promises 3-year price freeze if it can merge with Sprint

By Jules Wang February 4, 2019, 9:15 pm

One of the biggest worries industry watchers have about the proposed merger between Sprint and T-Mobile, the nation’s fourth- and third-largest wireless carriers, is the price impact. Both carriers offer the lowest cost per unit for service for MVNOs as well as consumers — as such, a larger proportion of low-income customers flock to either network.

T-Mobile has argued, despite the prospective decrease in competition, that prices would drop. It has now made an pledge in writing to the FCC to make it so.

A letter to the FCC, penned by T-Mobile CEO John Legere and obtained by Reuters, reads in part:

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While we are combining our networks over the next three years, T-Mobile today is submitting to the commission a commitment that I stand behind — a commitment that New T-Mobile will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint.

This suggests that the two carriers (and their various prepaid subsidiaries including Boost Mobile, Virgin Mobile and Metro by T-Mobile) will continue to operate separately until their networks have been integrated to a point of the new company’s satisfaction.

T-Mobile also issued another paper to the commission saying that it will do its best to absorb costs, but cannot guarantee against price hikes based on taxes and fees that are “not within the control of New T-Mobile.” One such example is the Netflix subscription subsidy T-Mobile offers to its customers — the movie streaming platform announced a price hike last month.

The self-titled “Un-carrier” is also seemingly expanding its customer care staff with up to 5,600 hires. Rural communities would see more than 12,000 jobs coming to the area, though most would be temporary for network expansion. T-Mobile did not address retail positions, which are expected to be cut due to redundancy.

In addition to the FCC, the Justice Department is conducting a review on the transaction. The companies hope to close within this half of the year.

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