Stephen Stokols, the brand new chief executive of Dish Network’s Boost Mobile phone brand, said the company received an alert from T-Mobile late last year that the operator planned to shut down its 3G CDMA network on or around January 1, 2022.
That came as a surprise – and not only because Stokols had just started working for Dish.
“We expected to have at least another year before the CDMA shutdown,” Stokols told Light Reading. He said Dish expected T-Mobile to keep the legacy CDMA network it acquired from Sprint up and running until 2023. That, according to Stokols, would have allowed Boost to more easily migrate most of its affected customers onto T-Mobile’s 5G network simply due to the ebb and flow of customers’ phone upgrades.
After all, most cell phone users buy a new phone every few years, and Boost had planned to offer those upgrading customers new 5G phones to get them off T-Mobile’s aging CDMA network and onto its new 5G network. “The natural churn and upgrade would have just taken care of it for us,” Stokols explained.
Now, though, Stokols said Boost will need to actively get those customers off T-Mobile’s CDMA network before the operator shuts that network down next year.
“We have to artificially intervene … to move customers over,” he said.
Stokols wouldn’t say exactly how many customers the issue will affect, but suggested it was in the millions. He also said Boost will need to ensure it has enough 5G phones to sell to those customers who make the switch.
“The accelerated timeline forces hundreds of millions [of dollars] of costs to be able to migrate customers over,” he said. “The cost to get in and migrate these customers … is significant.”
As a result, Stokols and Dish chief Charlie Ergen suggested that T-Mobile’s planned 3G shutdown could be viewed as anti-competitive. That’s noteworthy considering Dish, T-Mobile and the US Department of Justice agreed in 2019 to a transaction whereby T-Mobile would acquire Sprint while positioning Dish to enter the wireless industry first as a T-Mobile MVNO and, eventually, as a full-blown 5G network operator.
And that’s what’s happening: Shortly after T-Mobile officially acquired Sprint in 2020, Dish purchased around 9 million Boost customers who will remain on T-Mobile’s network while Dish builds its own 5G network.
Stokols wouldn’t say whether Dish plans any legal action against T-Mobile over the 3G issue, but suggested the FCC should investigate it. Officials from T-Mobile did not immediately respond to questions on the topic, and FCC officials declined to comment.
Shutting down 3G has proven to be a topic fraught with difficulties for a number of network operators. For example, Verizon now expects to fully complete its 3G network shutdown by 2023, roughly three years later than the timeline the operator initially laid out.
T-Mobile, for its part, has said it will shut its 3G CDMA network down “over the next several years” but has not provided specific timing. Some recent reports citing a letter from the carrier indicated T-Mobile planned to shut down 3G in 2022. But a source familiar with the company told Light Reading earlier this month that the letter was mailed prematurely, and that the official timing of T-Mobile’s 3G shutdown was still being figured out.
For Dish at least, that timing appears to have been decided. So what will Boost do about it now?
“Regardless of a network shutdown, getting customers onto the T-Mobile [5G] network is a better customer experience. So we’ve been doing that regardless,” Stokols said. “This just accelerates a lot of the initiatives we’re doing.”
Stokols said Boost continues to offer a variety of “competitive, attractive” upgrades to entice customers onto T-Mobile’s 5G network.
However, that’s not the final stop for those customers. Under the companies’ 2019 agreement, T-Mobile’s MVNO deal for Boost will end after seven years. By that time, Dish is expected to operate its own 5G network to provide services to those Boost customers. Thus, Stokols said the company is working to obtain phones that can work on both T-Mobile’s 5G network and Dish’s expected 5G network.
“We want any phone that we put in a customer’s hand to be able to work on our network too,” he said. “We don’t want to have two ‘hops’ – here’s a device for T-Mo, and a year from now, here’s a device for our network. It accelerates having to pay a premium for the Dish-enabled device as well.”