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T-Mobile Asks California to Lighten Some Sprint Merger Obligations

By Anders Bylund – Jun 24, 2020 at 8:54AM

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Citing the COVID-19 crisis, the wireless company wants a rollback of certain "burdensome" network and payroll changes.

Wireless network operator T-Mobile US (TMUS -0.14%) wants to lower the bar on some of the commitments it made in order to close the Sprint merger. Citing "long-term effects" of the COVID-19 pandemic, T-Mobile is asking the California Public Utilities Commission (CPUC) to lighten three of the company's specific promises.

What T-Mobile wants

On Monday, T-Mobile filed a petition to the CPUC asking for some modifications of a decision that approved the $23 billion merger under certain conditions. The filing notes that circumstances have changed since the commission finalized the decision on April 16.

T-Mobile requested changes to three specific requirements, leaving four of the commission's orders untouched:

  • The combined 5G wireless network should provide data services with 300 Mbps download speeds to at least 93% of Californians by 2026 rather than 2024, "as mistakenly noted in the Decision."
  • The requirement to add 1,000 new employees within three years is "burdensome and unjustified in light of the current COVID-19 crisis," according to T-Mobile. The company would prefer to hold its payroll numbers steady for three years.
  • T-Mobile's network expansion obligations should be measured by the same process that applies to the company's federal commitments rather than creating a new and potentially burdensome testing process.
A judge's gavel resting on a stand, surrounded by barely-seen digits and a bluish haze.

Image source: Getty Images.

The petition raised no objections to commitments regarding rural service requirements, California LifeLine support for discounted home service, stable 4G coverage during the transition to 5G networks, or diversity and reporting standards.

In a statement sent by email to several media outlets, T-Mobile said that it wants to align the commission's final decision with the outcome of its months-long talks with the CPUC. The ball is now in the CPUC's court as the commission reviews the filing and contemplates whether any of the requested changes should be made.

Anders Bylund owns one share of T-Mobile US. The Motley Fool recommends T-Mobile US. The Motley Fool has a disclosure policy.

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