• Thomas Parker

Federal judge approves T-Mobile and Sprint merger

On Tuesday, a federal judge in New York approved a merger of telecommunications firms T-Mobile and Sprint that had been held up by a lawsuit filed by 14 state attorneys general.

The lawsuit seeking to block the merger is one of the last remaining roadblocks, as the deal for T-Mobile to purchase Sprint for $26 billion was already approved by the Federal Communications Commission and the Department of Justice. The merger still requires approval from the California Public Utilities Commission.

Shares of Sprint soared 75% on Tuesday morning following the news.

The coalition of states attempting to prevent the merger argued that combining the third-largest and fourth-largest wireless carriers would cause price increases for consumers by reducing competition in the industry, while the merging companies argued that a merge would enable them to compete with AT&T and Verizon in an effort to build a nationwide 5G network.

"The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger," wrote Judge Victor Marrero in a decision filed on Tuesday morning.

The states argued that Sprint would continue operating effectively as a wireless services provider without the merger, but the court rejected this premise.

"The Court is thus substantially persuaded that Sprint does not have a sustainable long-term competitive strategy and will in fact cease to be a truly national [mobile network operator]," the ruling said.

FCC Chairman Ajit Pai said in a statement that the ruling "will help close the digital divide and secure United States leadership in 5G," and that the decision is "a big win for American consumers."

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