T-Mobile Fined For False Ring Tones On Rural U.S. Calls
Zacks Investment Research | Apr 16, 2018 11:23PM ET
T-Mobile US, Inc. (NASDAQ:TMUS) has agreed to pay a fine of $40 million to the U.S. Treasury to resolve a dispute with the government. The company was accused of failing to fix problems relating to phone calls in rural areas and using false ring tones, which were banned, to give the impression that the faulty calls were actually getting through.
T-Mobile accepted the charges and acknowledged that false ring tones were used on hundreds of millions of long-distance rural calls in violation of Federal Communications Commission (“FCC”) rules. The FCC announced the fine after an investigation, which showed that the company was involved in the practice of injecting false ring tones into calls.
The FCC order did not disclose if any of the hundreds of millions of calls with false ring tones were actually completed. It opened the investigation after callers were unable to reach consumers served by three rural carriers in Wisconsin, although T-Mobile acknowledged that the issue was resolved.
The T-Mobile's fine was the sixth settlement related to rural connectivity. In 2015, Verizon Communications Inc. (NYSE:VZ) had paid $5 million to address similar issues.
Moving ahead, T-mobile said that it remains committed to all customers across the country as the ringtone oversight was unintentional. The carrier’s network remains the fastest in America both in download and upload speeds.
The incident, however, has impaired the credibility of the company to some extent. Over the last three months, shares of T-Mobile have outperformed the Zacks Investment Research
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