T-Mobile and Sprint Corp to submit closing arguments for the merger deal in the U.S federal court on Wednesday

T-Mobile and Sprint Corp to submit closing arguments for the merger deal in the U.S federal court on Wednesday
  • U.S wireless carriers, T-Mobile and Sprint Corp, are aiming to merge with a deal worth $26.5 billion.
  • The states filed against the deal citing risk of higher prices for consumers following the merger.
  • T-Mobile says Sprint Corp will be out of business if it is prevented to merge with T-Mobile.
  • Wireless carriers suggest selling some of the Sprint's assets to Dish Network Corp.
  • Dish Network Corp is interested launching a new wireless carrier in the U.S. using Sprint's assets.
  • The states highlighted Dish's lack of experience & resources to become a competitive market player.

T-Mobile US and Sprint Corp, two of the most popular wireless carriers in the United States of America, have had their merger deal worth $26.5 billion on halt following an accusation that the deal violates the U.S antitrust laws. On Wednesday, the two companies are likely to present their argument to a federal judge and request approval for the merger.

As per the lawsuit filed against the merger deal in June, consumers are likely to face a sharp increase in prices following the merger. On the contrary, Sprint and T-Mobile have reiterated on multiple occasions that the merger will enable the two wireless carriers to effectively compete against rivals such as AT&T and Verizon Communications.

Trial Proceeded In Manhattan Federal Court For Over 2 Weeks In December

The trial had proceeded in Manhattan federal court for more than two weeks in December. On Wednesday, U.S District Court Judge, Victor Marrero, is expected to have both the parties submit their closing arguments.

The deal received approval from the U.S Justice Department last July as the carriers pledged to sell some of their assets to Dish Network Corp (satellite provider) that showed interest in establishing a new cellular network. The condition was directed at ensuring that the market will continue to have four competitors. As of October, the Federal Communications Commission had signed the deal.

T-Mobile CEO, John Legere, had previously testified that at the current pace of deterioration, Sprint will be out of business in 2020 if it is prevented from merging with T-Mobile. As per the sources, the wireless carriers have suggested themselves in the trial to sell a part of Sprint’s wireless spectrum and prepaid business to Dish Network Corp that will support its plans of launching a new carrier to preserve the 4th market player in the industry.

States Highlight Dish’s Lack Of Resources And Experience To Become A Wireless Carrier

California and New York led states, on the other hand, had argued that Dish lacked resources and experience to come out as a strong competitor for the U.S wireless carriers.

Sprint Corp had printed a yearly high of around $8 in the stock market in July following the Justice Department’s approval for its merger with T-Mobile. Due to the states filing in the federal court and the associated complications, the stock continued to drop in the second half of 2019 and closed the year at $5.21 per share. At the time of writing, the stock is exchanging hands at an even lower $4.86 per share.

By Michael Harris
Specialising in economics by academia, with a passion for financial trading, Michael Harris has been a regular contributor to Invezz. His passion has given him first hand experience of trading, while his writing means he understands the market forces and wider regulation.
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