Justice Department reaching out to MVNOs amid proposed T-Mobile/Sprint combination

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Some groups are concerned about what will happen to prepaid brands if the T-Mobile and Sprint combination goes through. (Pixabay)

The Department of Justice has reached out to the MVNO community as it reviews the proposed T-Mobile and Sprint merger, which should come as good news to MVNOs likely to be impacted by the deal.

The DOJ did not immediately confirm it to FierceWireless, but at least one MVNO has been contacted and others reportedly were as well. A FreedomPop spokesperson confirmed to FierceWireless that the DOJ reached out to the company. However, the spokesperson could not reveal the content of the conversation.

The move is significant because there are concerns about what will happen to MVNOs if the merger were to go through without certain conditions. Sprint traditionally has been an MVNO-friendly company. If Sprint combines with T-Mobile, that open-arms approach to MVNO relationships could change. On the other hand, MVNOs that currently use both as network providers will have one, bigger entity with which to deal and compete against the other big two.

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Last week, the National Wireless Independent Dealer Association (NWIDA) stepped out against the proposed merger, arguing that the transaction would stand as a “devastating blow” to prepaid customers, MVNOs and wireless dealers. T-Mobile owns the MetroPCS brand, while Sprint controls Boost Mobile and Virgin Mobile prepaid brands.

NWIDA President Adam Wolf joined Peter Adderton, founder and former CEO of Boost Mobile USA, to express concerns about the proposed transaction as structured. Adderton founded Boost in Australia in 2000 and has been actively voicing his concerns about the merger and its effect on prepaid brands.

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MVNOs don’t own their own physical network infrastructure but negotiate wholesale rates with network operators, including Sprint, T-Mobile, AT&T and Verizon, then resell mobile plans under their own brand. If the merger is approved without wholesale pricing protections in place, Wolf and Adderton fear MVNOs will see wholesale prices rise, leading many to lose money or close altogether.

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That the DOJ is conducting calls with MVNOs is a positive sign, according Adderton. “I’m extremely encouraged,” he told FierceWireless. “At least it’s a start in the right direction.”

Adderton just announced that he has retained the services of Manatt, Phelps & Phillips, LLP to represent his concerns regarding the proposed transaction. Jack Quinn, former White House counsel to President Bill Clinton, will lead the Manatt team.

Adderton is behind the website all4price.com, a website created to educate consumers, wireless users, legislators and staffers at the FCC and DOJ about their concerns. It’s a play on the allfor5g.com website launched by Sprint and T-Mobile that lays out their arguments for approval of the transaction.