Attorney Generals in 10 states have sued in order to block the coming merger between T-Mobile and Sprint.
The planned $26.5 billion merger would carry many different consequences, but the Attorney Generals can’t abide by one consequence in particular.
Should this merger be seen to fruition, the number of major wireless carriers in the US would drop from four to three. This fact alone has business, economic, and political leaders split on whether or not the merger should be allowed to move forward. T-Mobile and Sprint, for their part, argue that the merger will result in the two companies being able to expand their coverage faster, and allow for a nationwide 5G network faster than they’d be able to do separately. In this case, the two companies are arguing that the average American consumer will benefit from the merger.
The merger now has the backing of Federal Communications Commission chair Ajit Pai. T-Mobile and Sprint have promised to provide 5G wireless coverage to 97% of the US population in three years’ time, and to 99% of the US population within the next six years.
This highly significant merger has not come without serious questions and concerns, however. An investigation by Attorney Generals in 10 different states, including the District of Columbia, came to the conclusion that none of the benefits of the merger would make up for the 25% loss in competition that it would create. Indeed, there will only be three major wireless carriers in the US if the merger goes through, which would provide these companies with less incentive to offer more competitive pricing to consumers. The lawsuit in the books right now argues that the competition between T-Mobile and Sprint was what led to lower prices. The two companies did promise to not raise prices for the first three years, while also promising to focus on expanding coverage into remote rural areas. While these promises have been welcomed, the Attorneys General argue that freezing prices for three years falls short when compared to competition, which actually pushes prices down.