The only thing that seems to delay the $26.5 billion merger of T-Mobile and Sprint at the moment is a lawsuit filed by 16 attorneys general and Washington DC AG seeking to block the transaction on the grounds that it is anti-competitive and will cost residents of their states over $4.5 billion in additional costs each year. After T-Mobile and Sprint started discussing with the plaintiffs in a preliminary agreement a couple of weeks ago, a source familiar with the chat said both sides were miles away.
T-Mobile responded to the question with its own filing, In the document, the operator states that if the merger is blocked, Sprint cannot be counted as a competitor due to its financial difficulties. T-Mobile presented its response in court yesterday, noting that Sprint continues to lose subscribers and market shares. Furthermore, the wireless provider has negative cash flow and operates under a “huge debt burden”.
“Plaintiffs’ prediction that Sprint would abruptly reverse this long trend and emerge as a vigorous standalone competitor is nothing more than wishful thinking. Plaintiffs are dwelling in the past while the rest of the world is building superhighways.”- T-Mobile
Why should T-Mobile destroy the company it wants to merge with?
T-Mobile says that a merger with Sprint will not lead to higher prices and that it will not stop competition in the sector. To make sure there is healthy competition for US wireless customers. In the event of a merger, Sprint agreed to sell its prepaid assets, including Virgin Mobile and Boost Mobile to Dish Network, for a total of $5 billion. The agreement includes some 800 MHz cell and spectrum sites for Sprint. In addition, Dish has agreed to sign a seven-year MVNO agreement with T-Mobile; This will allow Dish to start selling wireless services on its behalf (using T-Mobile’s 4G LTE network) while the satellite content provider starts building its own independent 5G network. In their case, the prosecutors’ generals have labeled the agreement with Dish as a “fig leaf” that would be of no help to consumers.
You can think of yourself that throwing Sprint in the trash, T-Mobile makes the wireless carrier seem worthless acquisition. But there is something Sprint owns that would be of great help to T-Mobile and that is the treasure of the 2.5 GHz medium-range spectrum operator. T-Mobile plans to build the first 5G network nationwide in the US for next year. To do this, the company wants to take its 600MHz low-bandwidth spectrum and high-bandwave mmWave airwaves and add the 2.5GHz Sprint spectrum in between. Low-band spectrum, in which T-Mobile has already successfully tested 5G data sessions, travels further and penetrates better into structures than high-bandwidth waves. On the other hand, the latter has a much greater capacity and offers higher data rates.
5G is the next generation of wireless connectivity and can provide data download speeds 10 times faster than 4G LTE. Once 5G signals are available in the US, it will help create new businesses and industries that will promote the US economy. This is one of the reasons why T-Mobile is so eager to make this deal; The operator cites American leadership in 5G as one of the reasons he wants to merge with Sprint.
Initially, the lawsuit was scheduled to be tried in October, but the plaintiffs were granted a delay until December. The agreement will not be closed until a decision is reached in this case.
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- Report Says A Major Problem Is Preventing The DOJ From Approving The T-Mobile-Sprint Merger
- Sprint And Dish Have A Greater Risk Than T-Mobile If The Deal Is Blocked
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