With the Merger Blocked, T-Mobile Now Disconnecting Jobs

There’s more bad news for T-Mobile in the wake of their failed merger with AT&T—they’ve recently announced they’ll be closing 7 call centers over the course of the next three months, eliminating 1,900 jobs in the process.  You would expect this to mean diminished customer service and longer wait times for consumers looking for tech support or having service or billing problems.  This is bad news for T-Mobile, who has been having troubles for some time as they continue to lose customers and market share and, as a result, money. 

AT&T was quick to jump on this news as evidence that the FCC didn’t heed their warning when they blocked their proposed merger with T-Mobile. AT&T vice president Jim Cicconi took to the AT&T policy blog to say in part:

“… only a few months ago AT&T promised to preserve these very same call centers and jobs if our merger was approved.  We also predicted that if the merger failed, T-Mobile would be forced into major layoffs.”

“At that time, the current FCC not only rejected our pledges and predictions, they also questioned our credibility.  The FCC argued that the merger would cost jobs, not preserve them, and that rejecting it would save jobs.  In short, the FCC said they were right, we were wrong, and did so in an aggressive and adamant way.”

“Rarely are a regulatory agency’s predictive judgments proven so wrong so fast. But for the government’s decision, centers now being closed would be staying open, workers now facing layoffs would have job guarantees, and communities facing turmoil would have security.  Only a few months later, the truth of who was right is sadly obvious.”

Harsh words coming from a company who is regulated by this very same agency. There’s no doubt that T-Mobile is losing customers at an alarming rate, and perhaps the T-Mobile/AT&T merger could have helped stem the tide.  Would consumers and customers have been better served if the merger had gone through?

T-Mobile is having trouble competing with the larger wireless companies.  As was prefaced above, T-Mobile has lost thousands of customers over the last few years, over 800,000 alone in Q4 of 2011.  One of their problems, of course, has been the lack of the iPhone on their network.  The other could be described as network problems. (Although the two could very well be linked. Apple might not want their prized product to operate on the weakest of the 4 major networks.) The failed merger however would have, according to both parties, spurred investment in needed infrastructure upgrades, creating thousands of jobs and creating a more reliable network for customers of both companies.  T-Mobile is attempting to stop its slide.  Last month, the carrier announced that it would be deploying LTE on its network, investing $4 billion over the next 2 years to upgrade.  This is welcome news to its consumers, who would love to realize the speeds that customers of competitors are seeing and are poised to see in the future.

With the spectrum crunch we’re currently feeling and will continue to feel into the foreseeable future, consumers will demand better and more reliable service, both from their networks and from their wireless providers.  If AT&T is right, then the FCC may have made a critical error in its blocking of last years merger.

Zack Christenson writes on digital tech issues for the American Consumer Institute

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