The merger of T-Mobile and Sprint, first announced in April 2018, would combine the third and fourth largest wireless carriers in the United States. Opponents of the merger estimate 30,000 jobs will be lost as a result, and workers at both companies are in the dark about their future.
“We’re worried if they do merge—the overlapping of the stores that already exist—how that will impact us. Combining those stores doesn’t make sense and keeping everybody at the same time,” worries Vanessa Villalta, a T-Mobile retail worker in Houston, Texas. She has worked at the company for over five years. She told me she’s heard that as many as 25,000 jobs will be cut at retail stores, with an additional 5,000 call-center jobs eliminated.
“We don’t have anything in writing to secure our jobs, whether the merger goes through or not,” adds Erick Baca, another T-Mobile retail worker in Houston. The company has not been forthcoming with any details, telling its workers to direct customers who inquire about the pending merger to a website.
Corporate mergers around the world, worth a total of $3.3 trillion in 2018 in the first three quarters of the year, were on pace to break a record, with the majority of these mergers occurring in the United States.
Monopolies have received renewed attention from progressives since the House Democratic majority took control over the House anti-trust committee. As part of her presidential campaign, Senator Elizabeth Warren unveiled a proposal on March 8 to break up Facebook, Google, and Amazon, including undoing mergers such as Amazon’s acquisition of Whole Foods and Zappos, Facebook’s takeover of Instagram and Whatsapp, and Google’s acquisition of the navigation app Waze and home device company Nest. The proposal expands on the anti-monopoly policies progressives have pushed beyond breaking up the big banks that Warren and Bernie Sanders have frequently called for.
In February, Senator Elizabeth Warren, Democrat of Massachusetts, and Bernie Sanders, Independent of Vermont, co-signed a letter with seven other Democrats in the Senate opposing the Sprint-T-Mobile merger. It urged the Federal Communications Commission to oppose the deal to send a message that the government will protect consumers against harmful anti-competitive behavior.
Opponents to the merger argue it will drive up prices, hurt workers, stifle innovation, and create a less competitive market in the wireless industry. A December 2018 report published by the Economic Policy Institute estimated the merger will cause up to a seven percent reduction in average weekly earnings for retail wireless workers.
“Nearly all estimates of concentration in the wireless market agree that the increase in market concentration would be higher than the 2011 merger between AT&T and T-Mobile, which enforcers blocked,” said Matthew Buck, a researcher at the anti-monopoly group Open Markets in an interview. He believes the merger would drive up prices and downgrade services for all cell phone users, not just T-Mobile and Sprint customers, since it would reduce the need for providers including AT&T and Verizon to compete.
Company executives repeatedly stayed at the Trump Hotel in Washington, D.C., during visits to lobby on behalf of the merger.
It remains unclear whether the Trump Administration will block the merger, but both companies have pitched the deal as a win for the presidency. Company executives have repeatedly stayed at the Trump Hotel in Washington, D.C., during visits to lobby on behalf of the merger. T-Mobile admitted to spending $195,000 at the hotel since the merger plan was first announced in April 2018.
“With regards to the hotel stays, its indicative of the fact that the companies have a really poor case they are trying to make,” said Phillip Berenbroick, Senior Policy Counsel at the non-profit Public Knowledge, a member of the 4Competition Coalition formed to rally opposition against the merger. “The merger is illegal under the antitrust laws, its very clearly illegal under section seven of the Clayton Act. It will lead to significant reductions in competition.”
The merger is currently under review by the Federal Communications Commission.