Sat, 22 Feb 2020

New York v. Deutsche Telecom decision welcomed

Lola Evans
13 Feb 2020, 09:52 GMT+10

The $26.5 billion merger of T-Mobile and Sprint will proceed after it a challenge in court by more than a dozen U.S. states failed on Tuesday.

In the New York v. Deutsche Telekom trial, Judge Victor Marrero of the U.S. District Court for the Southern District of New York refused a request from the minority of state Attorneys General to block T-Mobile's proposed acquisition of Sprint.

Judge Marrero cited the Justice Department's settlement as a key factor in his decision, noting that the Justice Department's settlement made Dish "well poised to become a fourth MNO in the market, and its extensive preparations and regulatory remedies indicate that it can sufficiently replace Sprint's competitive impact."

"T-Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes. The proposed merger would allow the merged company to continue T-Mobile's undeniably successful business strategy for the foreseeable future," said Judge Marrero in his finding.

"I am pleased and agree with Judge Marrero's decision to deny the injunction, and particularly his conclusion that the department's divestiture and remedy package resolves the competitive concerns in this case," said Assistant Attorney General Makan Delrahim of the Justice Department's Antitrust Division in a statement. "This opinion is an important next step toward strengthening competition for high-quality 5G networks that will benefit American consumers nationwide."

"I am also grateful that the judge recognized the expertise of the Department of Justice and the Federal Communications Commission (FCC) in his evaluation of the transaction. As I have noted before, should a minority group of states, or even one, be able to undo the nationwide relief secured by the federal government, it would wreak havoc on parties' ability to merge, on the government's ability to settle cases, and cause real uncertainty in the market for procompetitive mergers and acquisitions."

The department's Antitrust Division filed a civil antitrust lawsuit on July 26, last year, in the U.S. District Court for the District of Columbia along with a proposed settlement that, if approved by the court, would resolve the department's competitive concerns. The Attorneys General for the states of Arkansas, Colorado, Florida, Kansas, Louisiana, Nebraska, Ohio, Oklahoma, South Dakota, and Texas have each joined in this proposed settlement. That proposed settlement, along with the United States' motion to enter final judgment, is pending before Judge Kelly in the U.S. District Court for the District of Columbia.

The FCC also approved the transaction after a thorough examination, with certain commitments as a condition of approval.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint's prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider. The proposed settlement also provides for a divestiture of substantial spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available for divestiture to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish transitions the business and builds out its 5G network.

"Judge Marrero's decision validates our view that this merger is in the best interests of the U.S. economy and American consumers," said Sprint Executive Chairman Marcelo Claure in a statement. "Today brings us a big step closer to creating a combined company that will provide nationwide 5G, lower costs, and a high-performing network that will invigorate competition to the benefit of all mobile wireless and in-home broadband consumers. With the support of federal regulators and now this Court, we will focus on quickly completing the few remaining necessary steps to close this transaction. I am proud of my Sprint team's dedication, passion and resilience throughout the merger review process, and we are ready to make the vision of a New T-Mobile a reality."

The T-Mobile camp was also enthusiastic about Tuesday's decision. "Today was a huge victory for this merger and now we are FINALLY able to focus on the last steps to get this merger done! We want to thank the Court for its thorough review of the facts we presented in our case. We've said it all along: the New T-Mobile will be a supercharged Un-carrier that is great for consumers and great for competition. The broad and deep 5G network that only our combined companies will be able to bring to life is going to change wireless and beyond. Look out Dumb and Dumber and Big Cable we are coming for you and you haven't seen anything yet!" said John Legere, Chief Executive Officer of T-Mobile in a statement released on Wednesday.

T-Mobile US Inc. is a Delaware corporation headquartered in Bellevue, Washington. In 2018, T-Mobile posted revenues of more than $43 billion. Deutsche Telekom AG, a German corporation headquartered in Bonn, Germany, is the controlling shareholder of T-Mobile US Inc.

Sprint Corporation is a Delaware corporation headquartered in Overland Park, Kansas. In 2018, its posted revenue was over $32 billion. Sprint is controlled by SoftBank Group Corp., a Japanese corporation headquartered in Tokyo, Japan.

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