Mobile promises the Sprint merger won't drive up prices… for now

Donna Miller
February 8, 2019

"Generally when it comes to mergers, the first side to offer concessions is likely to be the side that is losing", said Blair Levin, a former FCC chief of staff and an industry analyst for New Street Research. At $640 million - or $0.75 per share - T-Mobile profits still came in ahead of analyst expectations.

T-Mobile posted preliminary results for Q4 2018 last month and the final results for the end-of-year quarter remain unchanged. Revenues were up 6% from the year-ago quarter and up 7% on an annualized year-over-year basis, but net income was down 76% from Q4 2017 and down 36% from the year-end total for 2017.

In a letter to the FCC on Monday, Legere attempted to counter one of the main arguments against the merger - that as soon as T-Mobile absorbs Sprint, competition in the market will decrease and rates will go up.

T-Mobile CEO John Legere vowed on Monday not to raise prices on the mobile rate plans it now offers for three years if federal regulators allow his company to merge with rival Sprint.

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T-Mobile says that the new customer care employees will be eligible to receive benefits and opportunities such as significant management preparation experience, career development paths and college tuition reimbursement. For the full year, T-Mobile's net profits declined 36 percent to $2.9 billion - or $3.36 per share. Congressional hearings on the matter featuring Legere and Sprint's CEO Marcelo Claure are scheduled for February 13 and 14.

Some critics have argued that combining the networks would mean higher prices for customers, but T-Mobile is guaranteeing that it won't. "The core tenet of the New T-Mobile is that by bringing these companies together you get something very different from the T-Mobile you know today plus the Sprint you know today", he said.

In its more detailed proposal, T-Mobile (tmus) said it might raise prices under some circumstances it termed "not within the control" of the merged company. "With its business-friendly environment, diverse workforce and strong sense of community, the Greater Rochester area is a ideal location to build another New T-Mobile Customer Experience Center".

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