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T-Mobile and Sprint to merge after winning a lawsuit that would have blocked the deal

T-Mobile and Sprint to merge after winning a lawsuit that would have blocked the deal
(Image credit: T-Mobile)

A federal judge has ruled that a proposed $26 billion merger between T-Mobile and Sprint, two of the best cell phone providers, will be allowed to proceed after a group of state attorneys general tried to block the deal. The state attorneys general had tried to block the deal, arguing that it would reduce competition in the national cell phone provider market down from four to just three, the other two being AT&T and Verizon

The group feared that this would lead to higher prices for consumers due to a reduction of competition between the major providers. However, the judge, Southern District of New York judge Victor Marrero, ruled that these fears were unjust, stating that "The court concludes that the proposed merger is not reasonably likely to substantially lessen competition", going on to say that the deal would "enhance competition in the relevant markets to the benefit of all consumers.”

T-Mobile and Sprint are the third and fourth biggest cell phone carriers in the US, but the proposed deal could help to slingshot them into second place as its combined subscriber count would exceed that of current second place cell provider, AT&T. It will also help to consolidate its national cell phone coverage nationwide. You can check out our article on the current cell phone coverage maps to see what the changes might mean for you.

The case was complicated by the positioning of Dish Network, who are entering the national mobile carrier network game. As part of the judge’s ruling, T-Mobile has set up a mobile virtual network operator (MVNO) deal with Dish, allowing them to use its network to serve Dish customers for a limited period of time (originally planned to be seven years). Judge Marrero said that "Dish as a new entrant will constitute a substantial incentive to competition.”

Fight the power!

But others aren’t so sure. The state attorneys general had argued during the case that the deal will likely just incentivize Dish to piggyback on T-Mobile's network thanks to the comfortable deal, which would disincentivize them from setting up its own network infrastructure.

“Our fight to oppose this merger sends a strong message: even in the face of powerful opposition, we won’t hesitate to stand up for consumers who deserve choice and fair prices.” said California Attorney General Xavier Becerra, who led the coalition against the merger. “We’ll stand on the side of competition over megamergers, every time. And our coalition is prepared to fight as long as necessary to protect innovation and competitive costs.”

Given this news and the current fight between the US government and Chinese smartphone company Huawei, the number of options out there for Americans looks to be shrinking when it comes to the best smartphones too.