The Atlanta Journal-Constitution
T-MOBILE GIRDS FOR KEY BATTLE WITH STATES OVER MERGER DEAL
On Monday, a group of states will argue in a Manhattan federal court to block a $26.5 billion deal to merge T-Mobile US and Sprint.
If approved, the deal creates a new wireless giant that would overtake AT&T to become the No. 2 carrier behind Verizon Communications.
What’s at stake?
The states warn that if the carriers are able to merge, subscribers will lose the competition between them that has meant lower prices and better plans.
T-Mobile says the opposite: By combining with Sprint, it can reduce costs and lower prices.
For Sprint, a loss would keep it a distant No. 4 in the market, weighed down by a possibly crippling debt load.
Then there’s the wild card: Dish Network is seeking approval to enter the wireless market, and Chairman Charlie Ergen will have to convince the judge that Dish can quickly become competitive, even though the company has no experience in selling wireless-phone service.
Dish has agreed to buy Sprint’s Boost prepaid business, plus a number of cell towers and airwaves, and would commit to building an advanced 5G network that covers two-thirds of Americans within four years.
Will deal pass muster?
Can Dish really become competititive in a two- to three-year timeframe? The states can be expected to argue “no.”
Investors seem to be betting with the states. The spread between T-Mobile’s offer price for Sprint and the trading price — an indication of the deal’s risk — hit a high on Thursday.
T-Mobile is pledging to freeze prices for three years, offer free wireless broadband access to 10 million underserved students, and offer a new $15-a-month data plan capped at 2 gigabytes if the Sprint deal gets final approval.