The Arch Telecom lawsuit is a federal case brought in March 2023 by sixteen minority-owned wireless retailers who accuse Arch Telecom and T-Mobile of running a “squeeze and buy” scheme: terminating the retailers’ store agreements more than a year early, then buying the locations back for a fraction of their value. The plaintiffs are seeking $100 million in compensatory damages and $1 billion in punitive damages for breach of contract. The case is Digital Land Wireless, Inc. v. Arch Telecom Inc., filed in the U.S. District Court for the Eastern District of New York (No. 1:23-cv-01582).
Who Sued and Who They Sued
The plaintiffs are sixteen small companies that operated as “sub-dealers” selling T-Mobile wireless service, most of them minority-owned and community-based. They include Digital Land Wireless, Kal Electronics, Perfect Wireless Two, Reemas Fashion, Texas Mobile Solutions, Alpha Cellphone Plus, Making Foods, DB Wireless, Global T Management, Mainestream Wireless, DNSY, Mobile Media Passaic, Dreams of Field, ESP Wireless, Veyond Wireless, and Noblesse & Co. Digital Land Wireless later dismissed itself from the case without prejudice on August 21, 2023.
The defendants are T-Mobile USA, Arch Telecom Inc., Arch Telecom of NY Inc., and The Portables Choice Group LLC. Arch Telecom, founded in Yonkers, New York, in 1993 and led by CEO Alex Ghai, became the third-largest T-Mobile authorized retailer in the country after acquiring The Portables Choice Group effective September 1, 2022. That acquisition gave Arch Telecom 418 stores across 31 states and put it above the sub-dealers who ran the actual storefronts.
The “Squeeze and Buy” Allegation
The complaint describes a two-step scheme. Sub-dealers held agreements that ran until June 2024. Roughly two months after Arch Telecom closed its acquisition of The Portables Choice Group, the plaintiffs say Arch Telecom notified them that T-Mobile was exercising its right to terminate their locations, moving the cutoff up to March 2023. The complaint calls that an “artificial termination date” meant to push the sub-dealers out more than a year early.
Once the notices went out, Thomas Salvato, a director at Arch Telecom, allegedly contacted owners, reminded them their businesses had effectively been killed, and offered to buy their stores for what the complaint calls “a negligible amount of money,” often framed as a few months of commissions. Arch Telecom offered Kal Electronics $35,000 for its location before raising the bid to $100,000. Reemas Fashion, which the complaint says spent $80,000 on renovations, was offered $40,000 and $60,000 for its two stores.
Under the sub-dealer arrangement, T-Mobile controlled how the stores looked and operated down to signage dimensions, staffing levels, uniforms, and how cash was collected. The plaintiffs argue that level of control, combined with the timing of the terminations, shows T-Mobile and Arch Telecom acted together rather than as independent parties.
Merger Promises the Plaintiffs Say Were Broken
The plaintiffs tie the alleged scheme back to T-Mobile’s $26 billion merger with Sprint, which closed in 2020. When the merger was announced in April 2018, T-Mobile publicly promised to build “hundreds” of new stores, with then-CEO John Legere among the executives making those representations. The complaint alleges T-Mobile never disclosed an internal plan to do the opposite and eliminate independently operated stores.
In the meantime, T-Mobile managers auditing sub-dealer stores reportedly told owners “business is continuing as usual” and encouraged them to renovate to T-Mobile standards and renew leases for up to five years. Digital Land Wireless says it spent more than $150,000 on renovations on that basis. Some owners took on pandemic-era loans to keep operating. When Arch Telecom finalized its acquisition of The Portables Choice Group, it gave a similar assurance that “your experience will be business as usual” and that existing agreements would stay in force. The termination notices arrived shortly after.
What the Plaintiffs Want
The lawsuit seeks $100 million in compensatory damages and $1 billion in punitive damages. The legal theory is breach of contract. The complaint frames the conduct not as ordinary corporate restructuring but as “blatant violations of law” that left the plaintiffs holding lease obligations, unrecoverable renovation costs, and lost future profits.
Where the Case Stands
The plaintiffs originally brought class allegations but withdrew them at a July 20, 2023, conference. No class has been certified, and the case now proceeds on behalf of the individual plaintiff companies. The Second Amended Complaint, filed August 21, 2023, is the operative pleading.
The defendants signaled that they would move to dismiss on jurisdictional and merits grounds, but before those motions were briefed, the court referred the case to mediation on November 2, 2023. A mediation session was scheduled for December 18, 2023, with a January 19, 2024, completion deadline. The Portables Choice Group filed a status report on January 2, 2024. The public docket does not show whether mediation produced a settlement or whether the case returned to active litigation. As of the most recent docket activity in mid-2026, no trial date has been set and no motion to dismiss has been ruled on.
A Related Case in Nassau County
If you are looking at the Arch Telecom dispute more broadly, there is a separate state-court case worth knowing about, because it involves overlapping allegations. 170 East v. T-Mobile (Case No. 610050-23) is pending in New York State Supreme Court in Nassau County. It was brought by minority-owned third-party retailers who say they were forced to sell their stores or shut down.
The centerpiece of that case is a two-page letter dated August 4, 2022, from Codey Welker, T-Mobile’s Senior Director for Authorized Retailers, to Arch Telecom. The plaintiffs describe it as “key evidence” of collaboration between T-Mobile and Arch Telecom to end the sub-dealer program and force store closures. T-Mobile has argued the letter is “severely damaging” and should stay sealed. The plaintiffs say the document contains public, non-confidential information about store closures that belongs in the record. No final ruling on the sealing motion had been issued as of the most recent reporting.
Other Dealer Suits Against T-Mobile
The Digital Land Wireless case is not the only lawsuit from independent wireless dealers who feel they were discarded after the T-Mobile-Sprint merger. The National Wireless Independent Dealer Association, whose president Adam Wolf has been a vocal critic of the merger’s rollout for small retailers, has reported receiving copies of lawsuits from at least four former Sprint dealers in four states, alleging T-Mobile acted in a “predatory” and “anti-competitive” manner. Those plaintiffs included Absolute Wireless, Maycom, Solutions Center, and Wireless Express.
In a 2022 case in Orange County Superior Court in California, HIT Mobile sued T-Mobile for $60 million. HIT Mobile said it had participated in T-Mobile’s “preferred retailer Latino program” since 2009 and had taken on $21 million in debt to expand. After the merger, HIT Mobile alleged, T-Mobile forced it into unfavorable contracts and required the closure of profitable locations to make way for corporate-owned stores. HIT Mobile said it was eventually forced to sell for $35 million, roughly $55 million less than what it believed the business had been worth.
Wolf has pointed to a structural issue running through all of these disputes: independent wireless dealers function like franchisees but lack the legal protections of a formal franchise relationship. He described the dealer-carrier relationship as “mislabeled and fraudulently disclaimed,” leaving small business owners without the safeguards that a franchise operator would otherwise have.