Mobile and Sprint merger hits opposition from 10 state attorneys general

Mobile and Sprint merger hits opposition from 10 state attorneys general

"The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in NY and in urban areas across the country".

The complaint was filed in United States District Court for the Southern District of ny.

Ajit Pai, chairman of the Federal Communications Commission, said last month that he favored the deal, which is expected to reshape the US wireless industry.

James also said her office did not notify Justice before the states filed the lawsuit, adding it was not required for them to do so.

Other attorneys general joining Tuesday's lawsuit are from Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia and Wisconsin.

T-Mobile, whose parent company is Deutsche Telekom AG, and Sprint, controlled by Japan's SoftBank Group Ltd, did not comment.

The lawsuit, led by the attorneys general of NY and California, represents a major legal and political headache that could upend the $26 billion telecom tie-up, which also has divided federal regulators in Washington who must bless the deal in order for it to proceed.

T-Mobile declined comment to the Associated Press, while Sprint and the Justice Department did not immediately respond to requests for comment. They say that combining Sprint and T-Mobile will make the industry as a whole - Verizon and AT&T, too - less likely to offer plans and services that consumers like.

While AT&T and Verizon dominate the overall USA wireless market, T-Mobile is the most popular among customers who make less than $75,000 per year, and Sprint's Boost Mobile prepaid brand counts 83 percent of its users in that income range, according to Kagan, S&P Global Market Intelligence data. "If consummated, the merger will eliminate the competition between Sprint and T-Mobile", the states said in the complaint.

The two companies have been in regular contact with regulators as they lobby for approval. It's an assessment several Wall Street analysts have agreed with.

T-Mobile has a reputation for consumer-friendly changes to the cellphone industry.

T-Mobile, trying to reassure critics, promised the FCC it would build out a 5G network and invest in rural broadband on a specific timeframe or pay penalties. The companies offered to preserve some prices and rate plans and divest Sprint's prepaid phone business, called Boost Mobile, to a third party.

In May Pai and the FCC gave a thumbs up to the deal with the chairman touting the deal's potential improvements for 5G network deployment and increasing coverage in rural America.

But public-interest advocates said these conditions did not address the deal's main criticisms - higher prices in the long run and less wireless competition- and would be hard for regulators to enforce.

Since being announced a year ago, T-Mobile's push to merge with Sprint has been met with strong government pushback over concerns it would harm competition. It's unclear how Justice Department antitrust chief Makan Delrahim will decide, but the antitrust division staff has reportedly recommended that the merger be blocked. "Nor does it prevent T-Mobile from raising prices after the commitment ends".



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