Partnerships / Acquisitions

U.S. Gov’t Fights States’ Bid To Block Sprint, T-Mobile Merger Saying Move Would Slow 5G

A group of state attorneys are banding together to fight a merger of T-Mobile and Sprint that is backed by the United States Justice Department, according to a report from Reuters.

T-Mobile and Sprint are the third and fourth largest wireless carriers in the country. The deal is a $26 billion one and is being heard in federal court in New York, and could wrap up on Friday. The merger was approved in July by the Justice Department and in October by the FCC. The deal with the Justice Department was reached after the companies agreed to sell some assets to satellite provider Dish.

Thirteen states and the District of Columbia have banded together to try and strike down the merger. The state attorneys’ rationale is that the merger would result in higher prices for customers, so they moved to strike down the deal.

But the Justice Department and FCC argue that striking down the deal would mean that rural customers, in particular, would be delayed in getting 5G internet, the next generation of wireless. They also said the deal with Dish would provide substantial relief.

According to the agreement, Dish has until 2023 to build a 5G network. If they do not, they will have to pay the U.S. Treasury up to $2.2 billion.

In a filing, the agencies cited T-Mobile’s promise to provide 5G to 85 percent of the rural population in three years and 90 percent within six years.

5G is the new development of advanced internet connection that will make things like artificial intelligence possible, with companies like Apple expected to roll out products with the service, such as phones and headsets, by next year. The technology is expected to help facilitate the development of smart cities, autonomous vehicles and more automated factories.

FCC Chairman Reed Hundt told reporters earlier this month that having more 5G connection was “a national imperative.” He said he hoped the government would move fast and allow 5G to flourish by building out more networks.

There are 10 states that have signed on to back the Justice Department’s decision to approve the merger.

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