The U.S. Department of Justice has approved the $26.5 billion merger of T-Mobile and Sprint, but a group of 14 states said they will continue their legal fight against the deal, citing “serious” antitrust concerns.
The federal government’s green light for the merger came after T-Mobile and Sprint, the third- and fourth-largest wireless companies in the United States, agreed to create a new competitor by selling assets, including about nine million Sprint prepaid cellphone customers and additional wireless spectrum, to satellite-TV provider Dish Network.
To accomplish the merger, T-Mobile and Sprint entered into a settlement with the DoJ and five Republican state attorneys general.
The settlement “will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide,” said Assistant Attorney General Makan Delrahim in a news release.
But the Democratic attorneys general of 14 other states are pressing ahead with the lawsuit they filed last month to block the merger.
“We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers, and innovation,” New York Attorney General Letitia James said.
She noted that Dish has “never owned any kind of mobile wireless business and has no experience building or operating a nationwide mobile wireless network.”
As The Wall Street Journal reports, “The union of T-Mobile and Sprint, years in the making, would create a wireless company surpassing 90 million U.S. customers, closing the gap with Verizon Communications Inc. and AT&T Inc., which each have roughly 100 million wireless customers.”
Andrew Jay Schwartzman, a lecturer at Georgetown Law, said that even if Dish builds out its own network it will take years and, during that time, the three large carriers will be able to introduce 5G and lock in their subscriber bases.
“Rather than having Sprint as a weak fourth competitor, the combined companies will now face an extremely weak fourth competitor,” he told the WSJ.