Sprint and T-Mobile Merger Gets Approval from Judge

Sprint T-Mobile Merger

The merger of Sprint and T-Mobile in the US has been on the cards for years now, and it has finally received approval from a federal judge earlier today. The third and fourth-largest wireless carriers in the US might now be able to truly compete with AT&T and Verizon.

A federal judge allowed the $26 billion-merger between Sprint and T-Mobile, which will now allow the two companies to clear the final hurdle put forth by a group of state attorneys general. The merger was meant to happen last year, but the group of state attorneys general sued to block the deal citing a possibility of decreased competition and higher prices.

Victor Marrero, a judge of the Southern District of New York in the US, rejected the argument. The judge said that the deal is “not likely to substantially lessen the competition in the mobile market.” The judge also mentioned that the deal will likely enhance competition in the relevant markets to the benefit of all consumers.

Both the carriers have announced that they will be moving to finalize the merger as it has now received the final approval from the court. Mike Sievert, the incoming T-Mobile CEO, said that the deal could be closed as soon as the 1st of April 2020. Sprint’s stock prices soared more than 70% after the merger’s approval was announced.

FCC Chairman Ajit Pai had approved the merger of Sprint and T-Mobile last year, and he applauded the judge’s decision. He said that the merger will help close the digital divide across the US market and secure the 5G leadership the country needs.

T-Mobile also agreed to enter a limited-time deal with Dish Network for creating an MVNO (mobile virtual network operator). Dish will get access to T-Mobile’s network so that it could compete with the new T-Mobile after the merger with Sprint is closed.

Our Take

Mostly, fewer competitors in any market is not a win for consumers. Such a situation leads to lesser competition and higher prices, but in some scenarios, when the current winner in the market has a huge lead over others, mergers and acquisitions might be helpful to users.

We hope that the merger of Sprint and T-Mobile will lead to better networks and lower prices in the US. More importantly, it might make the rollout of 5G networks faster, which will push the whole market.