- The potential merger of T-Mobile and Sprint passed a major hurdle on Tuesday when a US District Judge ruled in favour of the merger.
- The merger was getting pushed back by several State Attorneys General who claimed that a merger between T-Mobile and Sprint would stifle competition and lead to higher prices and worsened wireless networks.
- US District Judge Victor Marrero found that Sprint was falling behind as a competitive entity among other wireless carriers such as Verizon and Sprint.
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T-Mobile and Sprint’s merger plans are one big step closer to completion after a federal judge ruled in favour of the merger.
The merger faced significant push-back from several State Attorneys General, who argued that a merger between T-Mobile and Sprint would lead to stifled competition, higher prices for consumers, and lower-quality wireless networks.
In the ruling, US District Judge Victor Marrero of the Southern District of New York said Sprint was not a major player in the competitive field in the wireless industry on its own, and that Sprint didn’t possess “the financial and operational means to survive in the near term as a national wireless carrier.” In effect, the fears held by the State Attorneys General who oppose the merger might still be true even if the merger were quashed, with Sprint likely going out of business resulting in one less competitor in the wireless industry.
“While Sprint has made valiant attempts to stay competitive in a rapidly developing and capital-intensive market, the overwhelming view both within Sprint and in the wider industry is that Sprint is falling farther and farther short of the targets it must hit to remain relevant as a significant competitor,” Marrero said.
FCC Chairman Ajit Pai said on Twitter that he was pleased with the federal court’s ruling.
I’m pleased that a federal court has approved the @TMobile/@sprint transaction. Post-merger, the company has committed to bringing #5G to 99% of Americans within 6 years. The deal will also put critical mid-band spectrum assets to use. This is a big win for American consumers. pic.twitter.com/2ofEqxmDBq
— Ajit Pai (@AjitPai) February 11, 2020
The merger, approved by the Department of Justice back in July 2019, faced increased scrutiny after leaked documents showed that T-Mobile considered a two-step merger, where it would first merge with Sprint, then with a cable company. It’s top choice, according to the report, was Comcast.
SoftBank has an 84% stake on Sprint, according to a Nikkei report from July 2019. If Sprint were to merge with T-Mobile, SoftBank’s stake would sit at 27%.
This is a developing story. Refresh this page for the latest.
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