Judge Approves T-Mobile-Sprint Deal Affecting 100 Million Customers

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Judge Victor Marrero of the United States District Court in Manhattan ruled in favor of T-Mobile’s takeover of Sprint in a deal that would further concentrate corporate ownership of technology, combining the nation’s third- and fourth-largest wireless carriers and creating a new telecommunications giant to take on AT&T and Verizon. The decision concluded an unusual suit filed in June by attorneys general from 13 states and the District of Columbia. The challenge was brought after regulators at the Department of Justice and Federal Communications Commission approved the deal. The states argued that the combination of T-Mobile and Sprint would reduce competition in the telecommunications industry, lead to higher cellphone bills and place a financial burden on lower-income customers. Once the merger is complete, the great majority of the nation’s wireless users would become customers of one of three major providers. T-Mobile and Sprint have said they do not plan to raise prices. 

In his ruling, Judge Marrero praised T-Mobile, calling it “a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes.” He added: “The Proposed Merger would allow the merged companies to continue T-Mobile’s undeniably successful business strategy for the foreseeable future.” Judge Marrero wrote, “The court concludes that the proposed merger is not reasonably likely to substantially lessen competition in the” mobile service market, and would likely “enhance competition in the relevant markets to the benefit of all consumers.” The deal will create a new carrier with more than 100 million users. After the merger is final, the majority of Sprint customers will eventually end up having T-Mobile plans. Customers of Sprint’s prepaid brands, including Boost Mobile, Virgin Mobile and Sprint prepaid, will become Dish Network customers. The original merger terms called for T-Mobile, the larger of the two companies, to effectively buy Sprint in an all-stock transaction that was earlier valued at $26.5 billion. Because of the lawsuit, the original deadline to complete the deal has passed, and T-Mobile has pushed to renegotiate the terms. The companies expect to close the transaction by April 1. The states could still appeal the ruling, and another US district judge in Washington reportedly must approve an existing Department of Justice plan for the merger partners. An approval from the California Public Utilities Commission also remains pending.

Judge Approves T-Mobile-Sprint Deal Affecting 100 Million Customers (New York Times) Sprint, T-Mobile deal wins judicial approval, ushering in new era of telecom behemoths (Washington Post) T-Mobile Sprint Win Court Case, Merger Could Close as Soon as April (telecompetitor) T-Mobile-Sprint Merger Gains Approval (Multichannel News) Sprint and T-Mobile merger approved by federal judge. Here's what it means for consumers (USAToday) T-Mobile and Sprint win lawsuit and will be allowed to merge (Vox)