CWA: SoftBank-T-Mobile US Deal is Non-Starter

CWA: U.S. Regulators Should Make Clear that SoftBank-T-Mobile US Deal is Non-Starter

January 20, 2014

Washington, D.C. － Statement by the Communications Workers of America on reports that Softbank, which owns nearly 80 percent of Sprint, is engaged in direct talks with Deutsche Telekom to buy T-Mobile US:

SoftBank Chief Executive Masayoshi Son is working hard to find a path to buy T-Mobile US.

Clearly such a deal raises deep concerns about what is in the best interests of U.S. consumers and workers at T-Mobile.

The Department of Justice and the Federal Communications Commission insisted that four national wireless carriers were necessary for competition when they opposed AT&T’s proposed bid for T-Mobile in 2011.

At that time, the Justice Department called T-Mobile an "aggressive competitor" that benefits consumers by ensuring that the other three carriers would be forced to compete on price. Since that time T-Mobile has been strengthened by spectrum from AT&T and Verizon, as well as its acquisition of Metro PCS.

It would be irresponsible now for regulators to endorse the bid by SoftBank, a company that brings much less to the table for consumers and workers than the AT&T bid.

SoftBank owns nearly 80 percent of Sprint. Sprint is already junk rated and carries a heavy debt load. Yet news reports indicate that Sprint likely would take on any additional debt, which could be $20 billion or more, related to this new deal.

Sprint already outsourced 100 percent of its network management to Ericsson, which in turn offshores much of that work to India. It also offshores 70 percent of its call center calls. The synergies that investors look for would mean that T-Mobile US workers, who already were hit with the closing of seven call centers in 2012 as that work was offshored by T-Mobile US would likely see more jobs disappear in a SoftBank-Deutsche Telekom deal. It is about time that concern for jobs is more than lip service from regulators.

The financial sector will benefit from this deal, but it would result in job loss for American workers and likely higher prices and fewer choices for consumers. Regulators need to make clear that this deal is a non-starter.