T-Mobile-Sprint merger still a bad deal for consumers

The U.S. Department of Justice said Friday it wouldn’t challenge the proposed merger of T-Mobile and Sprint. The approval comes as the two wireless companies have reportedly agreed to a divestiture plan to sell some of their assets to satellite TV company DISH to help that company build a new wireless network.

Consumer Reports, which opposes the merger, said the DISH deal will do little to address the serious concerns that a combined Sprint-T-Mobile would harm competition, and harm consumers and others in the marketplace who depend on that competition.

“The reported deal would eliminate Sprint, an established competitor in the wireless marketplace, and replace it with DISH, an unproven newcomer that has no experience in building its own wireless network, which it will need to build essentially from scratch,” George Slover, senior policy counsel for Consumer Reports, said.

“The deal reportedly gives DISH some of the building blocks it will need to make a go of it,” Slover said. “But it could take years for DISH to get to the point where Sprint is now — if it ever gets there. They are trading a bird in the hand for a pig in a poke.

“The Justice Department tried too hard to get to ‘yes,’ instead of staying focused on its mission of protecting competition and consumers,” he said.

Fourteen attorneys general continue to fight the merger deal. 

“The promises made by DISH and T-Mobile in this deal are the kinds of promises only robust competition can guarantee,” said New York Attorney General Letitia James. “We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers, and innovation."

The states’ lawsuit — filed on June 11 in U.S. District Court for the Southern District of New York — to block the merger of T-Mobile and Sprint, alleges that the merger of two of the four national mobile network operators would harm mobile subscribers by reducing access to affordable, reliable wireless service, significantly affecting lower-income and minority communities.

The states reaffirmed their commitment Friday to opposing the merger, which would reduce competition and increase prices for consumers. 

The states remain committed to protecting competition in the marketplace and lowering prices for consumers, James said.

Public citizen, a consumer advocacy group, said merger is a monopolistic disaster for consumers. Prices will rise, service will suffer, and it’s pure speculation to assert that this will benefit 5G.

T-Mobile currently has more than 79 million subscribers, and is a majority-owned subsidiary of Deutsche Telekom AG. Sprint Corp. currently has more than 54 million subscribers, and is a majority-owned subsidiary of SoftBank Group Corp.

Comments

[azure]

Texas has now joined w/other states in suing to stop the merger. https://www.reuters.com/article/us-sprint-corp-m-a-t-mobile-us/texas-joins-states-suing-to-stop-t-mobile-sprint-deal-as-trial-delayed-idUSKCN1UR5UU

There's hope.

[Rita]

Hi azure,

Yes, hooray for the attorneys general. I hope they can stop the merger.

Rita