Ex-Sprint dealers sue T-Mobile following Sprint store closures

A new lawsuit has been filed against T-Mobile this week by a group of wireless dealers. Fierce Wireless has seen copies of the suits. Absolute Wireless (South Carolina), Maycom (Florida), Solutions Center (Connecticut), and Wireless Express (Tennessee) all allege that T-Mobile’s merger caused these dealers to shut down as the merger resulted in either Sprint stores converting to T-Mobile stores, or outright closed.

According to Absolute Wireless and Solutions Center, T-Mobile only wanted to keep Sprint’s customers and its network, but generally didn’t want to keep Sprint’s dealers. As per Absolute Wireless’ lawsuit, T-Mobile “forced Absolute Wireless and other dealers out of their existing Sprint contracts, which had years remaining on their terms and which were more favorable than T-Mobile’s contracts,”.

According to Solution Center’s lawsuit, the company’s owner Mark Hudson was a Nextel dealer who ended up opening Solution Center after the Sprint/Nextel merger. It eventually grew to 28 stores across four states with over 200 employees. The merger has apparently resulted in more than $25 million in damages to Solution Center.

Maycom has been in business for 24 years and was one of Sprint’s top dealers. “In a matter of months, T-Mobile unlawfully devastated Macyom’s business,” says the complaint. “When the dust settled, of the 63 stores that Maycom once owned, only 28 remained to be sold at a T-Mobile created depressed value, 4 were given a limited 1-year lease renewal to operate and 31 stores were shuttered by T-Mobile.”

At the start of the merger, there were more than 9,000 Sprint and T-Mobile stores, this according to Jeff Moore of Wave7 Research. The number of stores is now less than 7,000, says Moore. Meanwhile, Metro stores have also dropped from over 9,000 to well under 8,000.

It is likely that the contracts made with the dealers were with Sprint, so once the T-Mobile merger took place and Sprint’s name was out the window, the contracts may have been thrown out as well.

It’s unfortunate that a merger caused stores to close and employees to lose jobs, however, this outcome was inevitable. Even the DoJ warned during hearings and deliberations that hundreds of retail stores would close, except the number was in the thousands according to Moore. It is impossible for a merger of this scale to ever be a win-win-win for all parties involved. As Americans say: “It’s just business”.

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