Washington (AFP) – US antitrust authorities on Friday approved the $26 billion merger of wireless carriers T-Mobile and Sprint in a deal that brings together the third- and fourth-largest operators in the sector.
The deal aims to create a strong number three US operator to compete against sector leaders Verizon and AT&T
It calls for Sprint to sell some of its prepaid wireless operations to Dish Network, to allow for a new competitor, as well as the divestment of some spectrum assets.
Makan Delrahim, head of the Justice Department’s Antitrust Division, said the agreement “will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.”
T-Mobile, whose parent is German-based Deutsche Telekom, and Sprint, controlled by Japan’s SoftBank, claim the merger will allow them to compete against their larger rivals as the industry moves to 5th generation, or 5G, wireless.
“The T-Mobile and Sprint merger we announced last April will create a bigger and bolder competitor than ever before — one that will deliver the most transformative 5G network in the country, lower prices, better quality, unmatched value and thousands of jobs,” said T-Mobile chief executive John Legere, who will retain the CEO job upon completion of the merger.
“Today’s results are a win-win for everyone involved. We cannot wait to get to work bringing this pro-consumer, pro-competition New T-Mobile 5G network to US customers from coast to coast.”
– Merger = higher prices? –
Consumer groups and others have criticized the deal, arguing that too much concentration would lead to higher prices.
Earlier this year, 14 states sued to block the deal. The Justice Department said five states agreed to the settlement, which still faces approval in court.
Joshua Stager of the New America Foundation’s Open Technology Institute said the deal falls short of retaining four “viable competitors” for the sector and said the effort to sell off assets to Dish was “needlessly convoluted.”
“DOJ does not need to bend over backwards to fix a bad merger. It can simply block the deal,” he said.
Derek Turner of the consumer group Free Press also denounced the deal.
“This arrangement does not offer cellphone users a viable fourth competitor in the wireless market,” Turner said.
“This merger is bad for wireless users and can’t be fixed.”