Ten US states file suit to block proposed Sprint & T-Mobile merger
The attorneys general of 10 U.S. states are launching a civil antitrust lawsuit to halt a proposed $26.5 billion merger of Sprint and T-Mobile, intensifying the carriers' uphill battle.
Participating states include California, Colorado, Connecticut, D.C., Maryland, Michigan, Mississippi, New York, Virginia, and Wisconsin. The host for the suit is the U.S. District Court for the Southern District of New York.
There are already just four dominant U.S. carriers, the suit warns, serving "at least 90%" of the country. It also accuses T-Mobile's controlling shareholder -- Deutsche Telekom -- of admitting that the merger any of those carriers would result in less competition and better profits for the remaining few.
Some statements by T-Mobile and Deutsche Telekom are redacted in the public version of the AG complaint.
"The combined market share of Sprint and T-Mobile would result in an increase in market
concentration that significantly exceeds the thresholds at which mergers are presumed to violate the antitrust laws," the suit alleges. "This increased market concentration will result in diminished competition, higher prices, and reduced quality and innovation."
While the merger has garnered support from the Republican-controlled Federal Communications Commission, the U.S. Department of Justice has reportedly been a strong opponent, with one rumor claiming it wants the creation of a spinoff carrier as a condition of approval.
Sprint and T-Mobile have imposed a July 29 deadline, and reportedly floated multiple concessions including the sale of Sprint's Boost Mobile brand, and a commitment to a three-year 5G expansion without hiking prices in the interim. A potential buyer for Boost may be Amazon.
The merged entity would still control Metro and Virgin Mobile USA, giving it massive influence over both the postpaid and prepaid markets.
Participating states include California, Colorado, Connecticut, D.C., Maryland, Michigan, Mississippi, New York, Virginia, and Wisconsin. The host for the suit is the U.S. District Court for the Southern District of New York.
There are already just four dominant U.S. carriers, the suit warns, serving "at least 90%" of the country. It also accuses T-Mobile's controlling shareholder -- Deutsche Telekom -- of admitting that the merger any of those carriers would result in less competition and better profits for the remaining few.
Some statements by T-Mobile and Deutsche Telekom are redacted in the public version of the AG complaint.
"The combined market share of Sprint and T-Mobile would result in an increase in market
concentration that significantly exceeds the thresholds at which mergers are presumed to violate the antitrust laws," the suit alleges. "This increased market concentration will result in diminished competition, higher prices, and reduced quality and innovation."
While the merger has garnered support from the Republican-controlled Federal Communications Commission, the U.S. Department of Justice has reportedly been a strong opponent, with one rumor claiming it wants the creation of a spinoff carrier as a condition of approval.
Sprint and T-Mobile have imposed a July 29 deadline, and reportedly floated multiple concessions including the sale of Sprint's Boost Mobile brand, and a commitment to a three-year 5G expansion without hiking prices in the interim. A potential buyer for Boost may be Amazon.
The merged entity would still control Metro and Virgin Mobile USA, giving it massive influence over both the postpaid and prepaid markets.
Comments
The use of “General” to address an Attorney General is also wrong, but has become rampant in the media. It is as stupid as calling a General Counsel at a corporation as “General”.
Attorney General comes from the French mode of title Attorney- General .
Our language is a dumpster fire these days.
English is pretty much a dumpster fire of a language in any case.
I’m concerned about the clause that they won’t agree to raise prices on “5G” for three years. IOW, you can expect to pay more for service soon, from basically everyone.
Currently I’m against the merger simply because the current (and corrupt) chair of the FCC is for it. Everything he’s done, almost without exception, has been pro-corporate and anti-consumer.
It's potentially a net loss for many stateside jobs. That's enough for many here to block the merger.
“The English language is very simple, every word has its own rule”
— uncle jay explains the news
PS. FWIW my investor buddy’s take - “As for the merger, they would control something like 80% of prepaid customers in the US. Clearly too much market power in my view.”
I was AT&T but it was getting too expensive when I added my Apple Watch 4, so I switched to T-Mobile. AT&T and Verizon seem best in the area for reception. I'm hoping that the merger will make the combine company equal in service for reception.
My favorite quote about the English language's penchant for "borrowing" comes from James Nicoll: