Home > Industry > Boost Warns T-Mobile & Sprint Merger Will Hurt Prepaid

Boost Warns T-Mobile & Sprint Merger Will Hurt Prepaid

Boost Mobile (AU & US) Founder, Peter Adderton, has warned the behemoth merger of Sprint and T-Mobile will likely harm prepaid customers – a notable 30 million individuals in the United States. The news comes as Adderton cautions against the launch of TPG Mobile in Australia, asserting the local market can support only three carriers, not four.

The proposed US$26.5 billion merger will centralise T Mobile and Sprint owned subsidiaries (Boost, Virgin and MetroPCS America) under a new T-Mobile brand. The merger is pending review from America’s DOJ and FCC.

Together, the three subsidiaries represent over 40% of America’s prepaid wireless market, and Adderton affirms this will impair competition.

“Prepaid allowed people who haven’t yet established credit to get access to the same wireless service we’ve all come to rely on. And it’s just as important, if not more so, to that segment of consumer today”

“So, I’m naturally concerned that this proposed merger could lead to higher prices for the people who are actually the most cost-sensitive.”

T-Mobile announced its intention to purchase Sprint in late April, claiming it would bring better competition in the broadband, wireless and video market.

Mr Adderton asserts if T-Mobile and Sprint desire to merge, it’s best regulators force them to sell their combined pre-paid subsidiaries.

“The two biggest fighting brands that have been driving prepaid prices down are going to become one, and that should not be allowed to happen,” he claims.

“It really is at the detriment of those customers. I call them the forgotten Americans. Because no one seems to be talking about them.”

He affirms it’s time America’s FCC and DOJ decide to regulate the MVNO space, in a bid to “fix the market”.

Should T-Mobile decide to sell Boost US, Mr Adderton states he [and his backers] would be interested in buying it back.

“It’s emotional for us. We want it to keep being the challenger brand,” he states.

The news comes as Adderton warns against the arrival of TPG Mobile in Australia, claiming the local marketplace “cannot support four networks”.

“To introduce a player and create a price war is good for consumers, but at some point, companies need to make money.”

Concerning the future of Australia’s mobile network industry, Adderton believes 5G will inevitable cause the demise of fixed line broadband.

“I believe 5G will be enough bandwidth for the average consumer, and you won’t need a fixed line broadband service. Talking with some of the carriers in the US, they agree too.”

He claims the “next generation” of Australian mobile users will be “entirely happy” with 5G, and cautions local carriers from building a business “around the idea families are going to sit down in front of a 60-inch screen”.

“It’s a flawed business model,” he warns.

Concerning the future of MVNOs (locally and globally) Adderton predicts an ‘Uber-esque’ model, which facilitates  seamless roaming domestically and internationally.

“Imagine if that happened. Where you purchased one service and roamed [freely], whether it is with Telstra, Optus or Vodafone. Using that mentality, [customers] just want the best network, at the best price, in that moment of time.”

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