T-Mobile, Sprint Merger Could Lead To Massive Layoffs

Even as the T-Mobile Spring merger is gaining traction, the T- Mobile US retail employees and technicians have sent a letter to Deutsche Telekom CEO Tim Hoettges seeking assurances against job loss from the proposed merger.

They also wanted assurance against pay cuts if the wireless carrier T-Mobile wins the nod to merge with Sprint.

The T-Mobile Spring merger news said the letter reflected the workers’ concerns that the merger would trigger job losses.

Deutsche Telekom owns a 63 percent stake in T-Mobile.

The labor union, T-Mobile Workers United, has 500 members and enjoys the backing of Communications Workers of America and the German union ver.di.

The union’s letter was handed to a board member in Seattle late Tuesday who would pass the letter to Hoettges.

Employees want solid assurance

The letter urged Hoettges to “make solid and verifiable” assurances that jobs will be safe, and paychecks will not diminish and the management will not meddle with union activities.

However, the major hurdle in T-Mobile’s $26 billion deal to take over Sprint is the court challenge from 15 states.

Already the Justice Department (DOJ) has given the in-principle nod for the merger. The Federal Communications Commission (FCC) has indicated it will also encourage the deal.

In the lawsuit against the merger, the District of Columbia argued that the merger is anti-consumer as it will burden them with higher prices.

Illinois Attorney General Kwame Raoul On Tuesday joined the lawsuit and opposed the Sprint and T-Mobile merger.

“With Illinois’ addition to our lawsuit, more than half the U.S. population is now represented by states that are suing to block the anti-competitive megamerger of T-Mobile and Sprint,” commented New York Attorney General Letitia James.

The trial on the lawsuits will begin on December 9.

The company did not comment on the letter from unions.

Meanwhile, some reports suggested that T-Mobile has halted deployment of some of the 5G network amid the pending Sprint merger.

Per reports in LightReading, T-Mobile suspended many purchase orders for network equipment for the remaining months of 2019.

The company’s rejoinder said: “We are managing capital expenditures as every year. We will continue to invest billions to build out our network aggressively, expanding LTE coverage and performance while laying the foundation for nationwide 5G in 2020.”

T-Mobile raises capital spending

T-Mobile has been expanding capital expenditure to enhance its network. In the second quarter, the company spent $1.66 billion on cash Capex compared with $1.53 billion in the Q2 of 2018.

The increase is attributed to the growth in the network build. T-Mobile is currently rolling out the 600 MHz lower-band spectrum and enhancing the groundwork for 5G technology.

The company expects its cash Capex for 2019 to be in the band of 5.4 billion to $5.7 billion.

Meanwhile, T-Mobile stock was up 0.62 percent in the after-hours trading on Wednesday while competitor vz stock (Verizon) jumped 0.24 percent in the last close.