1,000 new jobs may come to Fresno County – but this big obstacle stands in the way
It’s been a month since wireless phone companies T-Mobile and Sprint jointly announced their plans to establish a major regional call center in Kingsburg and bring about 1,000 jobs to the area.
But it will be several years before those jobs materialize – and only if a proposed merger between the two companies passes muster with federal antitrust regulators with the U.S. Department of Justice. The Kingsburg center is one of several such facilities, dubbed “customer experience centers” by T-Mobile, that are planned across the country.
“The New T-Mobile CECs are contingent upon the merger being approved,” a T-Mobile spokesman said this week in an email response to questions from The Bee. The email indicated that neither T-Mobile nor Sprint would move forward individually with the Kingsburg center or the others if the merger does not go through.
The Wall Street Journal reported last month that federal regulators advised the companies that the $26 billion merger was unlikely to be approved as proposed. Other reports, including Bloomberg, indicate that several states, including California, are considering suing to block the merger even if the federal government approves it.
T-Mobile and Sprint are the third- and fourth-largest national wireless carriers in the U.S., according to the Federal Communications Commission. The antitrust issue reflects concerns about a reduction in competition in the wireless industry and the potential for higher prices for customers. In its quarterly earnings statement for the first quarter of 2019, T-Mobile reported that it had more than 81.3 million customers as of March 31, while Sprint’s most recent earnings report indicated that it had nearly 55 million subscribers to its services.
In addition to approval from the Department of Justice, the FCC also has to sign off on allowing the radio frequency licenses now held by Sprint and its subsidiaries to be transferred to T-Mobile.
Plans delayed
Earlier this week, T-Mobile filed a statement with the federal Securities and Exchange Commission that T-Mobile and Sprint have pushed the anticipated closing date for the merger to July 29. Previously, the companies had indicated they expected regulatory approval in the first half of 2019.
In the face of the antitrust concerns, T-Mobile has embarked upon a public relations push to generate support for its deal with Sprint. From posts on its company blog and social media platforms to broadcast and newspaper ads, the company is touting the benefits of the merger. On Thursday, T-Mobile released an economic study by Emeryville-based Berkeley Research Group that estimates the the Kingsburg center will employ 1,007 workers, including 841 customer representatives and 166 managers and support staff.
More details
The report offers details that had previously been undisclosed by T-Mobile and Sprint in their initial April 3 announcement, including when the proposed center would open, the number of employees, and whether the company would build a new facility or lease an existing building.
If the merger is approved this year, “the center will be fully operational and staffed by 2022,” the report states.
“T-Mobile estimates that the employees at the center will have an average weekly compensation (salary plus benefits) between $1,129 and $1,254,” the report states. “Compensation at that level would be as much as 50% higher than the average weekly compensation at other call centers in the Central Valley.” The total payroll at the center, including employee benefits, is expected to amount to $56 million to $65 million a year.
The report also estimates that the company expects annual lease costs to be about $1.5 million, an indication of its plans to lease rather than own space in Kingsburg.
