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What’s Going On With The T-Mobile/Sprint Merger?

The future of the wireless carrier industry in the United States has been in flux for close to a year at this point. The potential merger between T-Mobile and Sprint is set to completely transform the space, but it still faces opposition in the courts. The final judicial decision is coming soon, but so far the case has centered around one key player: DISH Network. Let’s take a closer look at why DISH Network is so important to the outcome of this merger, and when this saga is likely to find a conclusion.

To start, it’s important to make sure everyone is up to speed on the three hurdles this merger has faced. The first two hurdles were approval of the merger by the U.S. Department of Justice (DOJ) and the Federal Communications Commission (FCC). Both departments have given their approval, the DOJ with the stipulation that DISH Network be allowed to buy a portion of T-Mobile and Sprint’s wireless infrastructure so the satellite giant can instantly become the fourth major wireless carrier in the United States.

In order to become the fourth major carrier, DISH has offered to purchase Sprint’s Boost Mobile, and combine it with their own substantial spectrum holdings in order to build out their own 5G network. As a part of that deal, DISH will have access to T-Mobile’s own network for the next seven years, while DISH builds out their own infrastructure.

All three companies have agreed to this plan, as well as the DOJ and FCC. The merger is now facing its final hurdle in the form of a lawsuit filed by various state attorney’s general. The judge is currently hearing arguments from both sides.

The Verge recently wrote about the case and why so many states are against the merger. “The states argue the merger will reduce competition, and as a result, is illegal under the Clayton Act, a federal law that forbids any merger whose effect ‘may be substantially to lessen competition.’ The state AGs also claim the lack of competition will result in higher prices and worse service after the merger goes through — but for legal purposes, all they really need to show is that the market will be less competitive after the merger.”

Naturally, most of the debate in court now revolves around whether DISH will actually become a competitor, or if their pivot into the fourth wireless carrier is more lip service than actual competition.

Honestly, both sides have a pretty strong case. It’s easy to play devil’s advocate and understand each sides point of view. As a result, it’s really anybody’s guess what the judge will decide. Both sides have presented their arguments, so it’s likely a decision will come down in the near future.

Only time will give us answers, but the future of the wireless industry in the United States should become more clear over the next few weeks.

Sources:
https://www.theverge.com/2019/12/20/21031299/t-mobile-sprint-merger-trial-dish-5g-state-lawsuit

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