The crux of the argument here is that T-Mobile and Sprint were both aware of the impact the merger would have on the network and that Sprint sold 5G-connected devices fully aware that, if the merger was approved, they would lose full functionality and connectivity, including heavily marketed 5G access. Sprint did not make its customers aware that they were taking a risk by purchasing these 5G-connected devices, like the OnePlus 7 Pro 5G, Galaxy S10 5G, and LG V50 ThinQ 5G, all of which could connect to Sprint’s 2.5Ghz 5G network but would be incompatible with T-Mobile’s network or re-use of those frequencies, due to the modems used on these models. And, when Sprint’s 5G network was shut down in 2020, these customers lost access to the network speeds they paid more in hardware costs to access.
Importantly, the lawsuit alleges that T-Mobile didn’t do anything reasonable in trying to fix the deficiency former Sprint customers experienced, claiming that “alternate “offers” made to transition them to 5G-enabled devices compatible with T-Mobile’s network would force them into more expensive plans and new payments for replacement devices.” The lawsuit further alleges that the shutdown of Sprint’s 3G CDMA network has been “burdensome” on those with the older devices and that these legacy customers have been “locked in their contract without being transitioned free of charge to T-Mobile’s Network, so that they may take advantage of 5G connectivity without having to pay out of pocket for pay devices to which they did not anticipate compatible nor initially agree upon.”
At the heart of the lawsuit: One angry dude with a OnePlus 7 Pro 5G on Sprint.
In short, T-Mobile ensured connectivity and forcing former Sprint subscribers to pay more in order to access it again, rather than making reasonable accommodations at the same price to their experience was not disrupted.
Although the suit doesn’t mention it, T-Mobile had quite generous hardware upgrade offers for affected customers. Those paying more than $10/mo to finance a OnePlus 7 Pro, Galaxy S10 5G, or V50 ThinQ on Sprint could replace that with a Galaxy S20 for $10/mo, which supported 5G connectivity on T-Mobile’s network. Better, those that owned one of those phones outright or paid less than $10/mo to lease one could just get one for “free” via an $0/mo lease with bill credits over 18 months. However, it’s not clear if this “upgrade” required that customers change their associated plan and pay more to essentially keep that 5G connectivity, as the lawsuit appears to claim. We’ve reached out to T-Mobile to confirm.
We should also point out that a group of AT&T and Verizon subscribers are also suing T-Mobile, claiming that the Sprint acquisition reduced competition, driving up prices on other networks. Before the merger was approved, several US states filed suit in 2019 based on identical concerns. The suit alleges that prices fell on average 6.3% a year before the merger was approved, and they have since “inflated.”
A tweaked version of this graph from the US Bureau of Labor Statistics, showing wireless telephone pricing on average, indicating when the merger occurred included in the filing.
Though the text of the complaint (direct PDF warning) doesn’t actually cite a single post-merger dollar-amount increase that I can find, a chart from the US Bureau of Labor Statistics indicates a noticeable concrete increase exactly timed to the merger, which is telling. John Leger, then-CEO of T-Mobile, even pointed out at an investor meeting that AT&T and Verizon’s competitive aggressiveness had slowed once the merger was announced, according to the filing, and that analyst expectations and revenue projections since then have shown improved revenue and reduced “competitive intensity.” Since then introduction of new plans and plan improvements on the part of the big three carriers since then it has also stalled, according to the filing.
We’ve reached out to T-Mobile regarding both of these lawsuits, and we’ll update if any additional information is provided. In the meantime, both of these suits are still in very early stages, so expect a wait before we hear anything more — if we do at all.