Fears on the part of Metro by T-Mobile dealers are escalating, as they see proposed changes by T-Mobile as threatening to their livelihoods.
In a petition being circulated online, dealers suggest the changes T-Mobile is a making to its Metro by T-Mobile prepaid dealer program could affect more than 8,000 stores and 20,000 employees. Dealers’ commission are getting drastically reduced, and they’re being forced to buy accessories from a single vendor, which will make their costs go up, according to the dealers.
Among the items the petition seeks: “Two more approved accessory vendors,” as well as: “Stop T-Mobile from poaching Metro customers.”
Dealers who recently organized through the Metro Dealers Unity Group say the moves T-Mobile has been proposing since it’s merger with Sprint are some of the most aggressive they’ve seen in years. Dealers’ relationships with carriers always have been fraught with some degree of turmoil, regardless of the carrier; both need one another but they often disagree on terms.
Some dealers are now calling for government intervention, citing the Federal Trade Commission (FTC) and Department of Justice’s Antitrust Division.
The Metro Dealers Unity Group is separate from the National Wireless Independent Dealers Association (NWIDA), but they’re both representing the interests of dealers. Even though dealers have been around for decades, NWIDA just formed a couple years ago; its board members each have been in the industry for more than 20 years.
Social media messaging, email and other communications are occurring between the dealers and T-Mobile, but so far, they’re pretty far apart.
“Nobody’s happy,” said NWIDA President Adam Wolf. “We’re talking to plenty of dealers,” including those big and small, which don’t always share the exact same concerns. However, there’s no end to the impasse. “We’re exploring other avenues,” he said, without getting into specifics.
One of the problems – and it’s not exclusive to Metro, it’s prevalent across the industry – is the Metro dealers are being treated as if they were franchises, and there are laws that protect franchisees, Wolf said. Dealers are more akin to licensees than franchises.
“They are kind of imposing franchise-like control over companies that are not franchises,” he said. “That’s where we need to get that fixed. Since none of these guys are franchisees, then stop imposing things that a franchisor would do to a franchisee.”
T-Mobile didn’t address specific complaints but provided the following statement to FierceWireless: “Independent wireless dealers are integral to Metro by T-Mobile. Always have been, always will be. Updates to our guidance and operating model are focused on providing the best customer experience possible and increasing opportunities for dealers to run successful businesses,” said Jon Freier, T-Mobile’s executive vice president, Consumer Markets.
Jeff Moore, principal of Wave7 Research, estimated the number of Metro by T-Mobile dealers to be in the range of 8,000 and falling. Earlier this year, reports surfaced that T-Mobile had given notice to non-exclusive dealers that they would not be allowed to sell Metro by T-Mobile if they sell other brands, which effectively means, any Metro by T-Mobile dealer is now relying solely on that one brand.
“If T-Mobile wants to treat us like T-Mobile but pay us like prepaid, that will not fly,” said one dealer who spoke on condition of anonymity because of fear of retribution. “Based on my communication with close to now 1,000 dealers, they have expressed they are very serious about switching their store to a multi-carrier as they will have the freedom to sell what they want, make 10-15% on other prepaid bill payments vs. $0, as currently set to change 10-1.”
NWIDA’s Wolf questioned T-Mobile’s intentions and wondered if the plan is to switch everybody to T-Mobile Prepaid. “We’re here for the dealer,” he said. “We want to help them out. We don’t want to see them get screwed. Whatever we need to do and can do, we’re going to do.”