Published: Wed, December 11, 2019
Electronics | By Kelly Massey

Trial begins in US states' effort to block T-Mobile/Sprint deal

Trial begins in US states' effort to block T-Mobile/Sprint deal

T-Mobile did not immediately return a request for comment.

The states argue the merger would leave just three nationwide wireless carriers, Verizon Communications, AT&T and the new T-Mobile, which could lead to higher prices.

Sprint chief marketing officer Roger Sole took the stand Monday morning. The trial will run until Friday, December 20 or Monday, December 23, depending on the number of hours the two parties need to present their case.

The trial of the century as far as the U.S. wireless industry is concerned has kicked off on Monday, and right from the start, the states opposing a $26.5 billion merger between T-Mobile and Sprint seem to have poked a few big holes in the two carriers' defense strategy. Although in majority of mergers, approval of the Department of Justice and Federal Communications Commission would be sufficient for closing a deal, 14 attorneys general are against the merger.

T-Mobile CEO John Legere, who steps down in April, last month acknowledged talks with Sprint to extend the merger agreement and did not rule out lowering the $26.5 billion price that was originally agreed upon. T-Mobile and Sprint argue that teaming up will help them battle Verizon and AT&T, the nation's top carriers, and lower prices. However, the company still needs to develop a new strategy to build a strong 5G network without Sprint's scope.

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Pai also argued that "the merger will promote robust competition in mobile broadband, put critical mid-band spectrum to use, and bring new competition to the fixed broadband market".

"It's hard to believe that going from a market with four big competitors to a market with three big companies will provide the amount of competition that keeps the playing field fair for consumers", Becerra said in a press call Monday.

More than a dozen states are suing to stop a deal that would see two of the top US telecoms companies merge into one, a move that state attorneys general argue would harm consumers and raise prices.

The AGs have also questioned whether Dish can be trusted to become a true fourth operator, citing how the company has no experience in operating a wireless company and has routinely failed to deploy the spectrum it has gained in recent auctions.

"While we see the odds as close, our view is that the states are more likely than not to win as public interest or industrial policy are irrelevant to competition analysis", said New Street Research analyst Blair Levin in a note to clients. It reiterates earlier arguments that T-Mobile and Sprint together will be able to build a better 5G network - a priority for the Trump administration - than both companies could manage on their own. Sprint is the only American operator that now offers 5G in what is known as a mid-band spectrum. Sprint and T-Mobile say there is, noting that other non-traditional providers like Charter and Comcast have recently launched mobile services. At one point, when T-Mobile offered customers a buy-one-get-one-free phone plan, Claure told Sole: "Let's match it".

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