T-Mobile waters down California job pledge as it refiles for Sprint merger permission

by Steve Blum • , , , ,

Tmobile san francisco 18may2019

T-Mobile (and Sprint, but it’s T-Mobile running the show) refiled and amended its application for merger approval with the California Public Utilities Commission on Thursday, as directed by the administrative law judge managing the case. Generally, the changes add a bit more detail about how the settlement T-Mobile reached with the federal justice department’s antitrust enforcers changes the promises it made to the CPUC earlier in the proceeding.

The core of the settlement involves transferring most of Sprint’s prepaid customers, along with retail outlets, cell sites and spectrum, to DISH, in order to create a new competitor in the mobile broadband market. The new commitments in the amended application boil down to we’re not making any promises about what DISH will do with the stuff.

Or with the people. Since some of Sprint’s employees –“prepaid asset personnel” – will be offered as a sacrifice to DISH, T-Mobile is removing them from its “voluntary commitment” to “extend job offers with comparable pay and benefits to all California Sprint and T-Mobile retail employees”.

If you read between the lines, though, it’s also possible – probable, if you assume T-Mobile’s lawyers use weasel words for a reason – many Sprint and/or T-Mobile employees will end up out of work, whether or not they’re being shopped to DISH.

On the one hand, T-Mobile originally promised “the total number of New T-Mobile employees in California three years after the close of the transaction will be equal to, or greater than, the current total number of Sprint and T-Mobile employees in California”. The amended application removes the “prepaid asset personnel” from that commitment and restates it as “no net job loss”, which indicates that the “or greater than” is weaselly worded indeed.

On the other hand, T-Mobile says it will create “approximately one thousand new jobs at a new customer experience center located in California’s Central Valley”.

Do the math. If T-Mobile adds a thousand people in Kingsburg, in Fresno County, and its Californian head count will be the same in three years as it is now, a thousand employees will have to make a career change. That might be a sound business decision, but it’s not the storyline T-Mobile is hoping the CPUC will buy into.

The next milestone in the CPUC’s lengthening review of the T-Mobile/Sprint merger is a hearing to consider what additional issues need to be addressed, and what the schedule for doing that will be. Given typical procedural timelines at the CPUC, a final decision isn’t likely until next year, perhaps some time in the first three months or so.

Links to the stack of arguments and exhibits T-Mobile and Sprint filed on Thursday are here.