Washington (AP) — US regulators approved T-Mobile's rival Sprint for $ 26.7 billion despite concerns over price hikes and job cuts.
Sprint and T-Mobile agreed to set up satellite TV provider Dish as a small competitor with Verizon, AT & T, and the combined T-Mobile-Sprint company, after Friday's approval by the Justice Department and five state attorney generals lost. "The dish was installed by the destructive power of wireless communications," said Makan Delrahim, the antitrust chief of the Justice Department.
But lawyers in other state and public interest advocates say that Dish is not a stand-alone company and replaces Sprint and does not deal with competitive harm caused by the terms of the deal.
"By signing this merger, the Justice Department did not take action for short-term and long-term damages caused by the loss of an independent Sprint for US wireless users," said Free Press Research Director S. Derek Turner.
The federal judge still needs to sign the approval because it contains the terms of the new company. The Federal Communications Commission is also expected to be blessed through the acquisition.
Dish paid $ 5 billion for Sprint's prepaid cell phone brands, including Boost and Virgin Mobile (around 9 million customers) from both companies and radio for some spectrum or wireless services. Dish will also be able to lease T-Mobile's network for seven years while building itself.
Dish on Friday promised that the FCC will build a nationwide network using next-generation "5G" technology by June 2023. But Dish is a slightly more promising speed than today's usual speeds, although 5G promises the possibility of blazing speeds.
The Trump administration was inconsistent in its approach to media and telecommunications mergers. When the government went to court to stop AT & T's acquisition of Time Warner, the Justice Department allowed Disney to buy a significant portion of its 21st-century Fox, a direct competitor, and the sale of assets was negligible to complete the contract. Mergers between direct competitors have historically had higher standards that the Justice Department can clean up.
Sprint and T-Mobile are now approaching Verizon and AT & T. These companies claimed that bulkup would mean a better next-generation "5G" wireless network than they could do on their own. Sprint and T-Mobile have argued that for a year, it would be better for American consumers for large companies to challenge AT & T and Verizon rather than small ones.
The two companies attempted to merge in the Obama administration, but regulators refused. They resumed the conversation about the union after President Donald Trump took office, hoping for a more industry-friendly regulatory body. As faster, more reliable wireless technologies are released and applications are built, it appeals to US Trump's desire to "win" the global 5G competition with China. They have been claiming their claims for over a year.
Meanwhile, the FCC agreed in May to cancel the deal after T-Mobile promised to build rural broadband and 5G, sell boost prepaid brands and keep prices for three years.
But advocates for public interests complained that the FCC terms did not solve the merger problem (raising prices, reducing wireless competition) and it was difficult for regulators to enforce.
The Attorney General from 13 states and the District of Columbia have filed a lawsuit to prevent the deal. They say they can't see the promised benefits, such as better networks in rural areas and overall faster service. I also worry that removing major wireless companies will reduce g competition and raise cell phone service prices, which will cause immediate damage to consumers.
They will not be satisfied with Friday's settlement. Some states involved in litigation were not part of that. New York State Attorney General Letitia James said in a statement: "We have serious concerns that the combination of this new fourth mobile player and the government's winners and losers will not deal with the damage of the merger to consumers, workers and innovation."
Dish is primarily a company in which the satellite TV business is decreasing. There is no wireless business, but over the last decade, it has spent more than $ 21 billion to accumulate large amounts of spectrum for wireless services. The wireless industry was actually skeptical of Dish's ambition to build wireless services. Instead, I guess you wanted to make money by selling the assets your company holds to other companies.
The long-term communications analyst, Roger Entner, founder of Recon Analytics, reported in an interview before the Justice Department announced. Many terms have been leaked to the press beforehand. Replaced with a weaker one on the plate.
No. 4 As a wireless provider, Sprint has thousands of stores and other distribution points, as well as cellular networks. While T-Mobile offers the option to take over some shops and cell sites that take over over the next five years, the plate has none of them. Entner said it would cost hundreds of billions of dollars to build and maintain retail operations and networks. He doubts whether Dish can do it alone or find a richer company that can help it as the core business declines.
But New Street Research analysts say Dish can build a cheaper network and offer customers a lower rate plan. It can still take years.
George Slover, senior policy advisor at Consumer Reports, said in an interview earlier that the current structure of the four competitors is working. He said it is not the same to reduce what enables competitors without infrastructure at present. "At some point dicing can be a competitive network, but it doesn't exist now."
Japanese giant SoftBank owns Sprint and German Deutsche Telekom owns T-Mobile. SoftBank will continue to own and influence 27% of the new large T-Mobile, but will not control the company.
Abel reported in New York. AP Technology Writer Mae Anderson contributed to this report in New York.