Friday the 13th was a very bad day for T-Mobile this year. First the California Public Utilities Commission ordered the company to show up at a virtual hearing to discuss allegations it lied to the agency to get approval for its merger with Sprint. While the company was digesting this news, an unrelated crisis was unfolding as hackers were apparently preparing to steal the names and Social Security numbers of T-Mobile customers, along with the IMEI (International Mobile Equipment Identity) numbers for their smartphones. News of the data breach started to surface on Twitter by the earliest hours of August 15. By Monday evening, T-Mobile had confirmed the breach, but said it did not know for sure if customer data was involved.
T-Mobile’s tailspin has so far been fairly controlled. The stock price slid less than 2 percent, and social media hasn’t been flooded with frantic posts from T-Mobile customers experiencing identity theft. This is not the first time T-Mobile has been hacked, and customers don’t seem to have penalized the company yet. But if reports that millions of their identities are now for sale prove accurate, this time could be different.
A less sensational but equally serious problem for T-Mobile could be the California Public Utilities Commission. The CPUC was never a big fan of the T-Mobile/Sprint merger, and did not actually approve the deal until two weeks after it closed. Even then, the Commission gave T-Mobile a laundry list of conditions that the carrier straight-up said it couldn’t meet.
Now the CPUC wants to talk about the conditions T-Mobile said it could meet. The Commission is listing specific statements T-Mobile executives made under oath before the deal was approved, statements the Commission says may not be true. Four separate points made by T-Mobile pre-merger are detailed in the CPUC’s filing.
- T-Mobile said its CDMA network would be available to Boost customers until they were migrated to DISH’s LTE1 or 5G services. (T-Mobile is now preparing to shutter the CDMA network at the start of 2022, and DISH has no plans to migrate the Boost customers by then.)
- T-Mobile said maintaining service to the CDMA network during the Boost migration wouldn’t impact T-Mobile’s 5G buildout. (T-Mobile now says it is using PCS spectrum to provide CDMA and needs to re-farm this spectrum to support 5G.)
- T-Mobile said all former Sprint customers would have a seamless upgrade experience during the migration period. (Former Sprint customers on CDMA are set to lose service altogether in January.)
- T-Mobile said DISH would have up to three years in which to complete Boost customer migration. (It hasn’t been three years.)
According to the CPUC, T-Mobile is now telling the Commissioners its 5G build “requires both the PCS spectrum and the cell towers presently employed to provide CDMA service including the equipment on the towers.”
The Commission has told T-Mobile to appear at a virtual hearing September 20, saying it can impose penalties of up to $100,000 “for each offense.” These are fines T-Mobile could absorb, but the carrier could have a harder time adjusting to changes in its 5G build plan. And the company is under a lot of pressure to make some changes.
“We absolutely disagree with the ALJ (Administrative Law Judge) action,” T-Mobile told Inside Towers, “which we believe is meritless and without basis in fact. We look forward to presenting evidence and setting the record straight through the upcoming process. For months, T-Mobile has been working aggressively to ensure no customer is left behind as we transition to technology that will better serve them into the future. We remain committed to that goal. Our CEO, Mike Sievert, also shared a blog post last week on the topic.”
The CPUC is not the only agency to push back against T-Mobile’s plan to shutter its CDMA network in order to re-farm the spectrum for 5G. In an email to DISH and T-Mobile, the Department of Justice said it has “grave concerns about the potential for a nationwide CDMA shutdown to leave a substantial proportion of Boost’s customers without service,” Inside Towers noted.
With pressure coming from both Washington and California, T-Mobile could delay the re-farming of the PCS spectrum, potentially delaying its 5G build plans.
T-Mobile told the FCC it would cover 97 percent of America with 5G within three years of the close of the merger. It recently updated investors on its progress saying 300 million Americans (about 91 percent of the population) would be covered by the end of this year, and 97 percent by the end of 2022.
It seems likely T-Mobile wants to use the PCS spectrum and associated tower sites next year to help it get from 91 percent to 97 percent coverage. Clearly the carrier is willing to face some regulatory and PR headwinds in order to redeploy the spectrum.
Some of the people set to lose cell service in January when T-Mobile shuts off CDMA could be the same people set to get “Extended Range 5G” next year, as T-Mobile builds out its 5G network to comply with its promise. Those people might prefer to just keep their phones, keep their service, and leave 5G for another day.
Veteran telecom industry editor and journalist Martha DeGrasse is an Inside Towers Contributing Analyst with features appearing twice per month. DeGrasse owns Network Builder Reports and contributes regularly to several publications. She was formerly a writer and editor with RCR Wireless and a TV business news producer.
By Martha DeGrasse, Inside Towers Contributing Analyst