Former Sprint dealerships sue T-Mobile after Sprint stores close
A new lawsuit was filed against T-Mobile this week by a group of wireless service resellers. Fierce Wireless saw copies of the costumes. Absolute Wireless (South Carolina), Maycom (Florida), Solutions Center (Connecticut) and Wireless Express (Tennessee) all allege that the T-Mobile merger caused these dealerships to close because the merger resulted in the conversion of Sprint stores in T-Mobile stores, or downright closed.
According to Absolute Wireless and Solutions Center, T-Mobile only wanted to retain Sprint customers and its network, but generally did not want to retain Sprint resellers. According to the Absolute Wireless lawsuit, T-Mobile “forced Absolute Wireless and other resellers to waive their existing Sprint contracts, which had years remaining on their terms and were more favorable than T-Mobile’s contracts.” .
According to the Solution Center lawsuit, company owner Mark Hudson was a Nextel reseller who ended up opening Solution Center after the Sprint/Nextel merger. It eventually grew to 28 stores in four states with over 200 employees. The merger apparently resulted in over $25 million in damages for Solution Center.
Maycom has been in business for 24 years and was one of Sprint’s top dealerships. “Within months, T-Mobile unlawfully devastated Macyom’s business,” the lawsuit states. “When the dust settled, of the 63 stores Maycom once owned, only 28 remained for sale at a depressed value created by T-Mobile, 4 received a one-year limited lease renewal to operate and 31 stores were closed by T-Mobile.”
At the start of the merger, there were more than 9,000 Sprint and T-Mobile stores, according to Jeff Moore of Wave7 Search. The number of stores is now below 7,000, Moore says. Meanwhile, Metro stores have also shrunk from over 9,000 to well under 8,000.
It’s likely that the deals the dealerships made were with Sprint, so once the T-Mobile merger took place and the Sprint name went out the window, the deals may have been rejected as well.
Sprint CEO Marcelo Claure and T-Mobile CEO John Legere at the carrier merger announcement in April 2018.
It is unfortunate that a merger has resulted in store closures and employees lose jobshowever, this result was inevitable. Even the DoJ warned during the hearings and deliberations that hundreds of retail stores would close, except that the number numbered in the thousands according to Moore. There is no way that a merger of this magnitude will be a win-win day for all parties involved. As the Americans say: “It’s just business”.