Dish Chairman brings T-Mobile/Sprint merger one step closer to the finish line

Dish Chairman brings T-Mobile/Sprint merger one step closer to the finish line
A trial challenging the long-pending merger between T-Mobile and Sprint that started last Monday took a somewhat surprising turn this week, as attorneys representing the 13 state AGs and the Attorney General for the District of Columbia opposing the mega deal focused primarily on a third party.

Of course, said third party was always expected to be considered a key piece of the merger puzzle, basically sealing the deal as far as the Federal Communications Commission was concerned. In a nutshell, Dish is supposed to take Sprint's place as the nation's fourth-largest wireless service provider and a viable rival to the "New T-Mobile" in the not too distant future, proving industry competition will not be weakened in either the short or long run.

The states didn't land many blows against Dish Chairman Ergen


As speculated since early last week, the aforementioned coalition of Democratic state attorneys general went directly for Charlie Ergen's jugular, trying to paint the controversial Dish Network co-founder and Chairman a very unflattering picture. In addition to Ergen's rule-bending and promise-breaking history in relation to various government agencies, the FCC included, the states also highlighted Dish's inexperience as a (potential) mobile network operator and its unwillingness to enter the market earlier despite sitting on a whole bunch of unused spectrum.


But at least according to New Street Research analysts quoted by FierceWireless, Ergen presented himself almost impeccably in court, explaining his side on "most of the issues clearly." After insisting his company has every intention to compete against T-Mobile right off the bat, leveraging newly acquired spectrum and established prepaid businesses from Sprint, as well as potential investments from a mystery partner suspected to be either Google or Amazon, Ergen was reportedly successful in "drawing parallels of building a satellite TV business from scratch to entering the wireless market" when pressed about Dish's lack of cellular industry background and customers.

Meanwhile, Ergen had no choice but to admit the company's own economists initially expressed concerns about industry-wide price hikes possibly resulting from a T-Mobile/Sprint merger, a key accusation point used by the states to support their arguments that seems to be gradually losing its importance. The fact of the matter is it's currently impossible to predict how the market will be impacted from a pricing standpoint in the long term by a switch from a "big four" situation to a big three group in which the third player grows a lot stronger all of a sudden.

Ergen was also cornered into confessing to an unusual interaction with Makan Delrahim, the head of the Justice Department's Antitrust Division, who recommended reaching out to FCC Chairman Ajit Pai through members of the Senate before the DOJ even formally approved the merger under condition that Dish be involved as a replacement for Sprint. But this "political intrigue" didn't impress Judge Victor Marrero much, as the states failed to prove there was anything illegal or even particularly shady about these discussions and the help Ergen admitted asking from Colorado Senator Cory Gardner.

The end of the merger saga is finally in sight 



It sounds like honesty truly is the best policy, and although it's still far too early to foresee how the lawsuit will end, with everything from a quick verdict in favor of the states to a last-minute settlement on the table, most legal experts and analysts seem to believe the judge is leaning towards siding with T-Mobile and Sprint right now. And while John Legere was pretty convincing in his testimony too, Charlie Ergen may have tipped the balance, bringing both Dish's $5 billion deal and the $26.5 billion mega merger that much closer to completion. 

By the way, the trial of the century for the US wireless landscape is expected to wrap up either Friday or Saturday (yes, this week), but Judge Marrero's decision is unlikely to be announced earlier than February 2020.

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