T-Mobile USA has served notice that it will shut down the CDMA-based 3G network it inherited with its acquisition of Sprint, in January 2022. This will mainly affect Dish Network, which acquired Sprint’s prepaid brand Boost Mobile as part of the conditions of approval for the TMO/Sprint merger. Many Boost customers are still using 3G.
Stephen Stokols, founder of MVNO FreedomPop, who joined Dish as Boost CEO last autumn, said this could affectms of customers and have significant financial implications for Dish.
In filings last week, Dish called on the FCC to intervene, saying the action would cause significant disruption, and Dish chairman Charlie Ergen criticized TMO’s decision on the recent fourth quarter earnings call. Stokols said the action “screams anti-competitive”, as TMO would be best-placed to snap up Boost CDMA users that found themselves with inadequate services.
He said in an interview that plans to migrate Boost users to the TMO 3G/4G network were underway, as this would provide a better experience than the ageing Sprint CDMA platform, but the January 2022 deadline meant this migration would have to happen 18-24 months sooner than planned, and well ahead of a timeline based on organic upgrades and churn patterns.
This means Dish/Boost will either have to spend money on marketing and incentives to accelerate the users’ process of migration, or would risk losing more customers than expected, when users are left with limited or no service. All this could cost “hundreds ofms of dollars,” said Stokols, and affect a large (though unspecified) number of Boost’s 9m user base.
“The biggest impact is where you need to get new phones,” he told FierceWireless. “All of a sudden we now need to worry about getting enough inventory to be able to movems of customers” within a 10-month timeframe instead of two years. “But it’s an investment we have no choice but to make or the whole business sort of gets crippled,” he added.
“There’s a lot of coordination that over a three-year timeline doesn’t really worry us, it’s business as usual. But when you consolidate three years into 12 months, it forces a lot of additional investment,” he said.