Ten Attorneys General from states such as New York, California, and even the District of Columbia have filed a lawsuit opposing the T-Mobile-Sprint merger, but now four US states are joining them.
According to Yahoo News, Hawaii, Massachusetts, Minnesota, and Nevada are joining the effort to block the merger deal between majority Deutsche Telekom-owned T-Mobile and majority Softbank-owned Sprint, the third and fourth US carriers, respectively. The amended complaint including the four US states will be filed Friday. Lawyers for the states and companies have requested a trial hearing for October 7th, a trial that could last three or four weeks.
The ten states Attorneys General filed their lawsuit on June 11th, to stop the purchase of Sprint by T-Mobile and halt plans to create The New T-Mobile (the proposed merger name). The reason pertains to what they expect as rising costs for consumers. According to their lawsuit, subscribers from both carriers could lose up to an additional $4.5 billion annually if the deal goes through.
Another concern for the Attorneys General and the US states themselves concerns the reduction of carriers. If T-Mobile purchases Sprint officially, the number of US carriers drops from four to three, which leads to less competition in the carrier industry.
Of course, the T-Mobile/Sprint merger deal isn't as nice, neat, and tied up in a bow as it sounds. First, the Department of Justice (DoJ) has required T-Mobile to sell Sprint MVNO Boost Mobile and radio frequencies. T-Mobile is willing to sell off certain airwaves and Boost Mobile to make the deal a reality, with T-Mobile considering Dish, Charter, and Altice.
Dish seems to be the most interested, as it has a ton of spectrum that's sitting, currently unused. Fear that the FCC could take it away from Dish is likely the motivating factor behind the company's desire to purchase Boost Mobile and put it to good use. Dish said this week that it is in no rush to acquire Boost Mobile for the current $6 billion asking price.
There's also been the question regarding why T-Mobile and Sprint want a merger in the first place. T-Mobile doesn't need Sprint, it's acknowledged, but Sprint's 2.5Ghz spectrum would help T-Mobile roll out its 5G network faster. Then there's the thought that the merger would create a third powerhouse carrier that could take on the likes of Big Red carrier Verizon Wireless and Ma Bell carrier AT&T. Up until now, these two carriers have been a duopoly with little competition from the bottom two.
A merger between the bottom two, T-Mobile and Sprint say, would create a tripoly (a monopoly of three carriers) that would force Verizon and AT&T to be better in order to compete. T-Mobile and Sprint subscribers would sit at a combined 135 million customers. For the two carriers interested in combining to create one new carrier, the merger will aid competition, not eliminate it, contrary to what the US states and Attorneys Generals say in the filed lawsuit.
The winner in the T-Mobile/Sprint merger would have to be fourth-ranked US carrier Sprint, the carrier least likely to succeed on its own. Despite Sprint's Marcelo Claure saying earlier that Sprint's merger wasn't about desperation, it is for Sprint. The carrier said in a 47-page letter to the FCC this Spring that Sprint, without T-Mobile, lacks the low-band spectrum and customer base to compete. Without the merger, Sprint could go under anyway.
So, in a situation where one carrier could go under financially due to its bleeding customer base and lack of low-band spectrum to compete with the other three carriers, or the third-top US carrier could acquire the bleeding carrier, which one is the lesser of two evils? The answer could be a toss-up, but if Dish acquires Boost Mobile, it's likely the merger will go through without further delay.