WHAT’S BEING CLAIMED:
- The green light from the Justice Department for the T-Mobile and Sprint $26B merger was announced on Friday.
- The approval came after T-Mobile agreed to sell assets and services to satellite company Dish to assist the company builds its own mobile wireless network.
- But in spite of the tie-up, both companies still face a suit filed by a coalition of attorneys general who contends that the company partnership will further cause harm to consumers and innovation.
T-Mobile got a nod from the Justice Department on Friday for its $26 billion merger with Sprint following its sale of tools to TV Company Dish to become the fourth biggest cellular carrier in the nation.
The sale of two prepaid mobile brands owned by Sprint- Boost Mobile and Virgin Mobile- together with spectrum licenses to Dish amounting to $5 billion earned T-Mobile an approval from the DOJ’s antitrust department.
Despite the marriage that would tie up the country’s third- and fourth-largest cellular companies, both are still faced with a lawsuit from 13 state attorneys general including NY AG Letitia James, who raised concerns that the merge will increase prices for consumers.
“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,” said NY AG James.
The Wall Street Journal reported Thursday that Delrahim attempted to persuade the AGs pushing for the deal to be blocked to drop their case against the company tie-up, but the coalition of AGs said they remain committed to taking their battle to court.
The companies though have agreed that if they are to be joined, no price increase will be imposed for three years.
Nevertheless, the approval from DOJ was a major obstacle that was only solved after the sale of assets to Dish.
Recently, DOJ antitrust chief Makan Delrahim threatened to prevent the T-Mobile/Sprint partnership when the deal to sell to Dish was delayed. Friday’s blessing sent stocks of both companies soaring in mid-day trading. A jump to $83.91 per share from 5 % was recorded by T-Mobile with Sprint leaping to $7.95 at 6.9%.
“Today’s 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,” declared Delrahim in his announcement of the agreement.
Additionally, while Dish will be busy spending years and billions building its own 5G network, the satellite TV Company also gets a 7-year access to the T-Mobile network to help speed up its offerings.
T-Mobile is owned by the German telecommunications company Deutsche Telekom AG with headquarters at Bonn, Germany, while Sprint which is based in Overland Park, Kansas, is controlled by Japanese telecommunications company SoftBank Group Corp., headquartered in Tokyo, Japan.
Source: New York Post