You will be redirected back to your article in seconds

Critics Charge That T-Mobile/Sprint Merger Would Raise Wireless Bills, Questioning Dish’s Ability to Compete

John Legere, T-Mobile’s trash-talking chief exec, claimed Friday that the $26.5 billion union of his company and Sprint is a “pro-consumer, pro-competition” deal.

His comments came after proposed merger was OK’d by the Justice Department with the requirement that the new company sell wireless assets to Dish Network, on the theory that this would establish a brand-new competitor in the market.

But consumer advocates expressed serious doubt about whether the deal does anything except knock out an existing competitor — Sprint — to the detriment of consumers while also inevitably eliminating thousands of industry jobs. (Legere boasted of $43 billion in cost-savings through T-Mobile’s takeover of Sprint.) T-Mobile and Sprint have pledged to not raise prices for three years, but industry observers say that represents only a short-term protection even if the newly merged company carries through on the promise.

“The merger would harm all wireless users through higher prices and diminished competition between the remaining three national carriers,” S. Derek Turner, research director as consumer-advocacy group Free Press, said in a statement.

The deal is not fully cleared yet: A lawsuit seeking to block the merger, filed by 14 states attorneys general, is still pending.

There’s plenty of skepticism about whether Dish will really represent a strong No. 4 competitor in the U.S. wireless market against the AT&T, Verizon or the new T-Mobile (with which Dish has a seven-year mobile virtual network operator agreement).

“Dish has never shown any inclination or ability to build a nationwide mobile network on its own and has repeatedly broken assurances to the Federal Communications Commission about deployment of its spectrum,” the office of New York Attorney General Letitia Moore said in a statement.

Critics also noted that there’s a built-in conflict of interest in setting up Dish to be dependent on the new T-Mobile. “The deal depends on T-Mobile giving a sustained, reliable assist to its new competitor as it tries to get established. Fundamentally, T-Mobile has no interest in doing that,” said George Slover, senior policy counsel for Consumer Reports. “If the past history of mergers is any indication, it will quickly look for ways to get around that promise.”

Meanwhile, Dish had previously lobbied against the T-Mobile/Sprint merger, arguing it would harm competition, as Free Press’ Turner pointed out. “Dish executives were against this merger before they were for it,” he said. “The fact that they’ve carved out a windfall for their company now does nothing to change the analysis they correctly put into the FCC record on this deal’s many harms.”

Some observers, however, bought into the T-Mobile/Sprint justification for the deal in arguing that it would more quickly produce a strong 5G network provider to rival AT&T and Verizon.

“The merged company would likely mean three, instead of two, 5G options for consumers in the future and a leg up for U.S. standards to become the default in the new technology,” said Jessica Melugin, associate director for technology and innovation at Competitive Enterprise Institute, a libertarian think tank.

As for the remaining legal challenge to the T-Mobile/Sprint merger, some Wall Street analysts don’t see it as a major threat that would kill the deal. T-Mobile “still must resolve the state lawsuits, but we don’t see this as a major problem given the DOJ will not be joining the state’s side,” CFRA Research analyst Keith Snyder wrote in a research note.

Shares of T-Mobile closed up 5.4% and Sprint climbed 7.4% Friday after the DOJ approval of the deal was announced. Dish inched up 0.8% for the day after dropping 9% earlier in the week on reports the the Justice Department clearance was imminent, because now that Dish has concrete plans to become a facilities-based wireless provider its spectrum holdings are valued as operating assets rather than as potentially salable assets.

More Biz

  • Legendary Celebrity Photographer, Terry O'Neill, in

    Terry O'Neill, Celebrity Photographer of '60s and '70s, Dies at 81

    Terry O’Neill, the British photographer known for his famous shots of celebrities in the ’60s and ’70s and his marriage to Faye Dunaway, has died after a bout with cancer. He was 81. O’Neill’s agency told the BBC that he had prostate cancer and died at home on Saturday night after a long illness. O’Neill [...]

  • Hollywood celebrated the individuals redefining "on-screen

    Media Access Awards Honors Individuals Increasing Representation for Disabilities

    Hollywood celebrated individuals redefining “on-screen representation for the disability community” with the Media Access Awards, in partnership with Easterseals, at the Beverly Hilton Thursday. Norman Lear and Jimmy Kimmel kicked off the event, which featured Camryn Manheim, CJ Jones, Coby Bird and “The Peanut Butter Falcon” actors Zack Gottsagen and John Hawkes presenting awards along [...]

  • 'Roxanne' Singer Arizona Zervas Signs With

    'Roxanne' Singer Arizona Zervas Signs With Columbia

    Hotly tipped singer-songwriter Arizona Zervas, whose viral hit “Roxanne” is in the top 40 of the Billboard Hot 100,  has signed with Columbia, Variety has confirmed. Since the release of the track on Oct. 10, “Roxanne” has reached nearly 50 million streams on Spotify. The single topped Spotify U.S. top tracks chart for an uninterrupted [...]

  • Jax Media at Variety New Leaders

    Jax Media Accepts Variety's Creative Leadership Award at New Leaders Cocktail Party

    This year’s Variety New Leaders event, presented by City National Bank, honored innovative visionaries in entertainment. The cocktail party was hosted on a chilly Thursday night in Lower Manhattan’s Jimmy Rooftop Bar at the James Hotel. Patrick McCarthy, senior VP and head of marketing for City National Bank, kicked off the event highlighting the new [...]

  • taylor swift, scott borchetta and scooter

    Rage Against the Big Machine: What's Driving the Taylor Swift Showdown

    The latest Taylor Swift-Scooter Braun-Scott Borchetta kerfuffle involves the sort of music business minutiae that doesn’t commonly interest the general public — in fact, it’s probably safe to say that untold thousands if not millions of people are suddenly familiar with the concept of re-recording old masters. But in blasting Braun on social media and [...]

  • Redbox

    Redbox Settles Disney Suit, Agrees Not to Sell Download Codes

    Redbox has settled its litigation with Disney, agreeing not to resell codes that allow customers to download movies. Redbox has traditionally offered DVDs for rent through its distinctive kiosks. In October 2017, the company also began offering download codes at a considerable discount compared to the price on iTunes, Amazon or other services. Redbox did [...]

  • Shari Redstone: ViacomCBS 'Can Compete With

    Shari Redstone: ViacomCBS 'Can Compete With the Best of Them'

    Shari Redstone is emphatic: ViacomCBS has plenty of resources and the scale to compete in the new world order for media giants. “We absolutely have enough scale,” Redstone said Friday morning during her Q&A held as part of the Paley Center for Media’s International Council Summit in New York. “We have an incredible library. We [...]

More From Our Brands

Access exclusive content