Ten US states sue to stop Sprint merger with T-Mobile
US attorneys general file an antitrust lawsuit to block the potential Sprint/T-Mobile merger.
Sprint's impending $26.5 billion merger with T-Mobile could be in jeopardy. Ten US state attorneys general are suing to stop the merger between the telecommunications companies.
Why are states suing to block the Sprint/T-Mobile merger?
In the antitrust complaint filed by the attorneys general, they allege that the potential merger between the phone companies could lead to higher prices for customers.
‘Direct competition between Sprint and T-Mobile has led to lower prices, higher quality service, and more features for consumers. If consummated, the merger will eliminate the competition between Sprint and T-Mobile,’ said the states in their complaint.
Leticia James, New York’s attorney general, claims that T-Mobile’s union with Sprint would limit low-income consumers’ access to wireless service.
‘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 New York and in urban areas across the country,’ said James.
Lawsuit conflicts with FCC chair's support of Sprint/T-Mobile merger
The antitrust lawsuit comes just weeks after US Federal Communications Commission (FCC) chair, Ajit Pai, recommended that his agency approve the merger of the phone companies.
'Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives,’ said Pai.
While the US attorneys general think that the Sprint/T-Mobile merger will lead to increased prices, Roger Entner, founder of telecommunications research firm Recon Analytics, doesn’t think that the union of the two corporations would greatly impact prices for customers.
‘I don't think it will make a significant difference in prices going forward,’ said Entner.
In addition to the FCC, the US Justice Department has to approve the Sprint/T-Mobile deal before it’s finalised.
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