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Did you know that there are six states supporting the T-Mobile-Sprint merger?

Published: Aug 20, 2019, 10:53 PM

Did you know that there are six states supporting the T-Mobile-Sprint merger?

With support from the Department of Justice (DOJ) and FCC Chairman Ajit Pai, you would have thought that the $26.5 billion T-Mobile-Sprint merger would already have been completed. But a lawsuit filed by 16 state attorneys general and the AG of Washington D.C. that seeks to block the transaction won't go to trial until December 9th. While T-Mobile and Sprint have started discussing settlement talks among themselves and with the plaintiffs, there is no sign that a settlement is within reach. T-Mobile won't sign the paperwork to close the deal until the litigation comes to an end.

Originally, the attorneys general of nine states were taking part in the suit, and have since been joined by seven more. But on Monday, the attorney general of one state joined the attorneys general of five others by supporting the combination of the nation's third and fourth-largest carriers. In a press release (via Fierce Wireless), Louisiana Attorney General Jeff Landry noted that the merger will bring more wireless service to Americans living in rural areas. Louisiana now joins Kansas, Nebraska, Ohio, Oklahoma, and South Dakota; the six states have filed documents with the court requesting that the merger be allowed to go through. As part of some concessions it made to placate the FCC, T-Mobile has agreed to cover 97% of the country with low band 5G service (85% in urban areas) within three years after the deal closes.

T-Mobile says that the merger will add 11,000 jobs by 2024

"America continues to lead the world in the development and roll-out of next-generation wireless networking. Unfortunately, costs of expansion and stagnant competition have left many in rural Louisiana and America behind. Reversing this trend, and within six years of the completion of this merger, the new T-Mobile aims to provide coverage to 90% of rural America and offer in-home broadband service to over five and a half million rural Americans,” continued General Landry. “This will provide dynamic competition to markets historically plagued with insufficient choice and inadequate expansion. Louisiana citizens living in rural communities deserve meaningful competition and reliable service,” concluded General Landry. “I strongly support the proposed settlement and merger as the new T-Mobile will increase competition and prioritize rural expansion."-Jeff Landry, Attorney General, Louisiana

The states trying to block the merger argue that the deal would violate antitrust laws, eliminate jobs and lead to higher prices. However, T-Mobile CEO John Legere has said from the start that the merger will create new jobs. Last October, the executive discussed this in a Town Hall meeting streamed to Sprint employees and said that 3,000 new jobs would be created in the first year following the merger, rising to 11,000 by 2024. During the event, Legere said, "T-Mobile employees don’t automatically get a job; Sprint employees don’t automatically get a job. We are going to choose who is the best person that is suited to do specific jobs, and that is a big deal."

Louisiana Attorney General Jeff Landry tells the court that he supports the T-Mobile-Sprint merger

As for the fear about higher prices, as part of its agreement with the FCC, T-Mobile promised to freeze prices for three years following the close of the merger. And despite the warnings from the state attorneys general that the transaction is anticompetitive, a stronger T-Mobile-Sprint could be more trouble for Verizon and AT&T than the status quo. Besides, as part of the deal to get approval from the DOJ, Sprint agreed to set Dish Network up as the "fourth nationwide facilities-based network competitor." For $5 billion, Dish gets Boost Mobile, Virgin Mobile, 14MHz of 800MHz spectrum, access to 20,000 cell sites and hundreds of retail locations. Dish signed a seven-year MVNO agreement with T-Mobile so that it can offer wireless service while building its own 5G network.

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