Merger Approval Likely

By Todd Horwitz 

A federal judge is expected to approve T-Mobile US Inc.’s merger with Sprint Corp., according to people familiar with the matter, clearing the way for the two wireless rivals to combine and overcoming a state antitrust challenge. The decision, which these people said is expected to be made public Tuesday, would hand the carriers a victory over a group of state attorneys general who argued the merger could result in higher cellphone bills for customers.

The parties have been notified of the imminent ruling, the people said. It is unclear whether the ruling could require the parties to make additional concessions beyond what they already agreed to offer the federal government. The third-largest U.S. wireless carrier by subscribers has been awaiting a decision from a federal judge on whether it can move forward with its $26.5 billion merger with Sprint.

However, a deal can’t close until the California Public Utilities Commission approves the transaction, which still hasn’t occurred nearly two years after its announcement. T-Mobile, Sprint and Dish Network, which is awaiting approval to start a new national wireless network, all haven’t seen the judge’s ruling, according to people familiar with the matter.

The details and potential conditions of the transaction are essential to ensuring the deal still makes sense to all parties, the people said.

The merger was seen by many as a bellwether for the future of the U.S. wireless industry.

The carriers argued that the merger between the No. 3 and No. 4 wireless providers in the country would accelerate the timeline for 5G technology. The carriers also argued that there was sufficient competition in the wireless market, pointing to Dish, Comcast, and other satellite and cable companies that offer or plan to offer their own wireless subscription plans.

Sprint has struggled in recent years to hold on to customers, while T-Mobile has been adding new users every quarter. During the trial, Sprint’s chief executive testified that his company offers “an inferior product” that puts it in a “vicious cycle” of customer losses and dwindling resources.

The states challenged the companies’ direst predictions during the trial, drawing parallels between T-Mobile’s weak footing in 2011—after government opposition forced it to scuttle a planned tie-up with AT&T—and Sprint’s current predicament.

Both companies have pushed lower prices and unlimited data plans to woo customers from Verizon and AT&T. Wireless prices have ticked downward in recent months but remained relatively stable since late 2018. What consumers might pay for cellphones and wireless service as a result of the deal was at the heart of the two-week trial.

Todd “Bubba” Horwitz