Federal judge approves Sprint's merger with T-Mobile

February 11, 2020 - 1:16 pm
Categories: 

NEW YORK (AP) — A federal judge has cleared a major path to T-Mobile’s $26.5 billion takeover of Sprint, as he rejected claims by more than a dozen states that the deal would mean less competition and higher phone bills.

Though the deal still needs a few more approvals, T-Mobile expects to close it as early as April 1.

Once that happens, the number of major U.S. wireless companies would shrink from four to three. T-Mobile says the deal would benefit consumers as it becomes a fiercer competitor to the larger Verizon and AT&T. The deal would also create a new, but smaller competitor as satellite TV company Dish pledges to build a next-generation, 5G cellular network.

A group of state attorneys general tried to block the deal, arguing that having one fewer phone company would cost Americans billions of dollars in higher bills. Consumer Reports said the three remaining companies would have fewer incentives to compete on prices and quality.

Breaking News: T-Mobile is allowed to take over Sprint, a judge ruled. The merger would combine America's third- and fourth-largest wireless carriers. https://t.co/OmgiSsWDZi

— The New York Times (@nytimes) February 11, 2020
Judge Victor Marrero in New York said Tuesday that the companies’ insistence that the deal would cut prices and the states’ insistence that the deal would raise prices “essentially cancel each other out.” Instead, he chose to rely on what wireless executives have done in the past and what they commit to doing in the future in an industry that is changing rapidly.

T-Mobile has pushed in recent years such consumer-friendly changes as restoring unlimited data plans. Marrero said he found that T-Mobile executives were credible at trial in promising to continue competing aggressively with AT&T and Verizon.

The judge also agreed with the companies that Sprint was “at best struggling to even tread water” and would not last as a national wireless competitor. He also said that he is persuaded that the U.S. Justice Department’s side deal with Dish, which sets up the satellite TV provider as a new wireless company, would reduce the threat to competition.

Comments ()