When T-Mobile announced to its employees the sad news that it was cutting more than 1900 positions in call centers all around the country, few knew that this would spark a communications fight between AT&T and the FCC about whether or not the government entity should have let AT&T acquire rival T-Mobile. In a letter to the company, T-Mobile CEO officially announced the cuts, saying that these “are not easy steps to take” and that the end-game was to make T-Mobile a profitable, and growth business.
Shortly after, Jim Cicconi, AT&T’s senior executive vice president of external and legislative affairs posted that “AT&T promised to preserve these very same call centers and jobs if our merger was approved”. “We also predicted that if the merger failed, T-Mobile would be forced into major layoffs. Rarely are a regulatory agency’s predictive judgments proven so wrong so fast”, he adds.
The FCC was quick to reply that “In a short period of time, T-Mobile has re-emerged as a vibrant competitor in the mobile marketplace”, citing that a competitive landscape brings benefits to customers (usually in terms of better pricing or services). The FCC adds that AT&T’s “own confidential documents showed that the merger would have resulted in significant job losses.”
Now the debate rages as whether or not prevent the merger was a good idea. Some say that it’s a good thing because AT&T’s customer service isn’t as good as T-Mobile, and that this would create yet another mega-corporation, which would be too powerful. Interestingly, that’s why AT&T was broken into pieces in the 80s. Here is a very interesting timeline of AT&T’s history.
It does not take a lot of imagination to think that AT&T is seizing the moment, and that it is using the job issue as a rhetorical tool, but it is one that seems relatively effective and the argument is getting traction with parts of the public. On the other hands, it is clear that the goal of a merger is generally to create economies of scale, and that often includes slashing jobs to avoid redundant positions. What’s your take in this debate? Was the FCC right in opposing the merger or is it a good thing to have four major carriers in the country?