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California gives up opposition to T-Mobile US and Sprint merger

The final hurdle the long and arduous merger proceedings for T-Mobile US and Sprint has finally been overcome, 1 year, 8 months, 3 weeks and 3 days after it was first announced.

California Attorney General Xavier Becerra has announced a settlement with the two firms, and also said the legal fees of all the States would be covered by T-Mobile US. Alongside Becerra, a California judge has also recommended the state’s Public Utilities Commission (CPUC) approve the deal. California has only been delaying the inevitable over the last few weeks, but the stubborn stance from the Attorney General has at least ensured at least some benefits for the State of California.

“Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,” Becerra said.

“We took our case to court to ensure that, no matter its outcome, we’d protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers.

“Most importantly, today’s settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities.”

As part of the deal, the new T-Mobile company will:

  • Offer guaranteed data tariffs for a period of at least five years. 2 GB a month deals can be bought for $15, while 5 GB will be $25
  • Any deal which was bought prior to February 2019 will also be guaranteed for an additional two-year period
  • Certain low-income homes, nationwide, will be offered 100 GB of no-cost broadband internet service per year for five years or a free mobile wifi hotspot device
  • Create 1,000 jobs in a customer service centre in Kingsburg
  • Guarantee the number of jobs in California for the newly merged company will be the same in three years as is it today

California does certainly benefit from the Becerra opposition, but the Attorney General has also negotiated a $15 million purse which will be split between the coalition of State Attorney General’s who opposed the deal to pay for legal costs.

After all the legal battles, the T-Mobile US and Sprint merger can now be completed, though it does remain to be seen whether this ultimately is of benefit to the consumer. Critics have suggested the US courts have favoured competition to AT&T and Verizon from T-Mobile US over increased wireless competition for the consumer, though this is under the assumption that the Dish proposition will fail.

With Dish entering the fray as the fourth nationwide player, there is a beacon of hope for sustained competition, though it will certainly face an uphill battle. The service will run as a MVNO on the T-Mobile network for a seven-year period, though whether this is enough time remains to be seen. Its competition has been fine-tuning network deployment for decades, and still hasn’t perfected the art or blanketed the US in its entirety.

We are still trying to figure out the logic of how Dish can be an appropriate substitute for Sprint. Either, the courts have immense faith in the business, zero confidence in Sprint or simply believes three stronger players is better than four.

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