The merger between Sprint Corporation (NYSE:S) and T-Mobile US Inc (NYSE:TMUS) was looking good as the new CEO would have been from the company to be acquired. However that hit a snag when FTC sued T-Mobile US Inc (NYSE:TMUS) recently and it accused the company of adding millions of $ in the form of bogus charges to the bills of subscribers until the last December.
CNBC’s “Squawk Alley” team discussed this and they explained how the bills are being loaded with a lot of additional charges not just by T-Mobile US Inc (NYSE:TMUS) but also a lot of other telecom companies such as Sprint Corporation (NYSE:S), AT&T Inc. (NYSE:T) or Verizon Communications Inc. (NYSE:VZ) .
“All of us who have looked at a cell phone bill, know that there are all kinds of charges on there that are probably bogus.” Jon Fortt stated.
He thinks that the government had a fee for a long time on this which was going nowhere. However the charges might not impact and hurt T-Mobile US Inc (NYSE:TMUS) specifically as almost every one of the subscribers look at the cell phone bills suspiciously and if the users can quickly respond to this by alerting the authorities with the irregularities this might also bring other telecom companies such as AT&T Inc. (NYSE:T) , Verizon Communications Inc. (NYSE:VZ) and Sprint Corporation (NYSE:S) into suspicion too which is not very hard and looks feasible.
Michael Santoli, Senior columnist at Yahoo! Finance, said that though this charge would act as a counter to the new image of T-Mobile US Inc (NYSE:TMUS) as being a friend of the cell phone user, it might not change the business proposition of the company. He thinks that the merger might actually create a strong No.3 in the telecom market. Santoli feels that the companies need to be aware of the evolution of the products for the future and they can’t just rely on the present.
Kayla Tausche pointed out to the announcement made by T-Mobile US Inc (NYSE:TMUS), where the company offered music streaming service for free without data charges and she said that the FTC fining it makes us wonder why the company couldn’t find this before the Feds did. Fortt explained how the backend teams of these companies are getting adapted with the change in billing systems, where they add all sorts of charges from subscriptions of music services to adapt for new ways to charge for data and how it’s all getting complicated for a subscriber.