As the U.S. Department of Justice approves a merger to join two major mobile companies, Minnesota Attorney General Keith Ellison said he still has concerns.
Ellison joined 13 other attorneys general last month in a multistate attempt to block the T-Mobile and Sprint merger. Though the deal received blessings from the Department of Justice on Friday, July 26, and the Federal Communications Commission last month, the lawsuit will delay proceedings and could still kill the deal entirely.
The companies are the third- and fourth-largest phone carriers in the country, with about 135 million subscribers combined. As part of the deal, DISH Network would take over Sprint’s prepaid phone business.
"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, while unlocking an unprecedented $43B net present value in synergies," said T-Mobile CEO and New T-Mobile CEO John Legere in a statement..
The merger plans for DISH to become the fourth-largest carrier, but Ellison said there are concerns about whether the company, which does not have its own network, would be able to transition into the role because it would remain reliant on the T-Mobile network for the foreseeable future. The lawsuit raises concerns that DISH has not shown interest or ability to create a nationwide network and has broken promises to the Federal Communications Commission in the past.
T-Mobile and Sprint are the lower-cost carriers among the “Big Four,” which includes Verizon Wireless and AT&T. Ellison said the merger would end competition between companies, which the Department of Labor said has been responsible for improved service and a 28% price drop during the past decade.
“This is an important day for our country and, most important, American consumers and businesses,” said Sprint Executive Chairman Marcelo Claure. “We plan to build one of the world’s most advanced 5G networks, which will massively revolutionize the way consumers and businesses use their connected devices to enhance their daily lives. The powerful combination of 5G, artificial intelligence and the Internet of Things will unleash endless possibilities.”
Nonetheless, the decreased competition could lead to higher prices, fewer jobs and less service, Ellison said.
The multistate lawsuit said the market consolidation could disproportionately impact low-income and rural communities. The average U.S. household spends $1,100 annually on cell services, according to a press release from Ellison’s office.
“I’m still very concerned that this mega-merger would hurt Minnesotans’ ability to afford their lives,” Ellison said. “Less competition in the wireless industry will mean higher prices, fewer jobs and lower-quality service. This merger would especially hurt lower-income families, communities of color and rural communities in Minnesota.”