T-Mobile Fined for False Ring Tones on Rural U.S. Calls

An image of people surrounding a sheet of paper with many charts on it
Credit: Shutterstock photo

T-Mobile US, Inc.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. 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 industry with an average loss of 0.3% compared with a decline of 3.2% for the latter.

T-Mobile carries a Zacks Rank #3 (Hold). A couple of better-ranked stocks in the industry are United States Cellular Corporation USM , sporting a Zacks Rank #1 (Strong Buy) and SITO Mobile, Ltd. SITO , carrying a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

United States Cellular has an expected long-term earnings growth rate of 1%. It exceeded earnings estimates in each of the trailing four quarters, with an average of 306.5%.

SITO Mobile has an expected long-term earnings growth rate of 25%.

Breaking News: Cryptocurrencies Now Bigger than Visa

The total market cap of all cryptos recently surpassed $700 billion - more than a 3,800% increase in the previous 12 months. They're now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.

Zacks has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.

Click here to access these stocks. >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Verizon Communications Inc. (VZ): Free Stock Analysis Report

T-Mobile US, Inc. (TMUS): Free Stock Analysis Report

SITO Mobile, Ltd. (SITO): Free Stock Analysis Report

United States Cellular Corporation (USM): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Other Topics


Latest Markets Videos


Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

Learn More