T-Mobile points to Sprint customer losses and ‘huge debt load’ to argue in favor of merger

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T-Mobile’s merger with Sprint is facing a lawsuit from 16 state attorneys general who say that the deal will reduce competition, raise prices, and harm jobs. However, T-Mobile has argued that Sprint is unlikely to be meaningful competition if left on its own.

In a court filing yesterday, T-Mobile responded to the state AGs lawsuit by arguing that Sprint has been steadily losing both subscribers and marketshare. T-Mo also said that Sprint is also stuck with a “huge debt load” and a largely negative cash flow.

“Plaintiffs’ prediction that Sprint would abruptly reverse this long trend and emerge as a vigorous standalone competitor is nothing more than wishful thinking,” T-Mobile said in its filing. “Plaintiffs are dwelling in the past while the rest of the world is building super highways.”

The state AGs lawsuit against the T-Mobile-Sprint merger was originally filed in June with 10 states. Other states have joined in the months following, including Texas and Oregon. They argue that the merger will “substantially” lessen competition and that prices for wireless service are “likely to be higher than they otherwise would be.” They’ve also said that T-Mobile’s deal to turn Dish Network into a fourth competitive U.S. carrier is a “fig leaf” that won’t actually help consumers.

One of the main arguments that T-Mobile has been making in favor of its merger with Sprint is that it’ll help bring “5G for all”. T-Mo wants to use the mid-band spectrum that it’d acquire from Sprint to help it build a nationwide 5G network, which is why it’s arguing in this court filing that Sprint is losing customers and marketshare and has a “huge debt load”. The trial between the state AGs and T-Mobile-Sprint is slated to begin in early December.

Source: Bloomberg

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  • Mike Smith

    I think the merger is great not only for T-Mobile but for Dish… they HAD to do something.

  • Me

    It wouldn’t be that surprising at all if Verizon has lobbied these AGs and / or other government officials (at least in part) to stall the merger as long as possible to get / keep the 5G edge.

    • Robert Roll

      even if they have lobbied the AGs to stall the merger they will have the edge in the short run.. but in the long run if it ends up going thru when T-Mobile builds out there network they could in theory put the hurt on Verizon by dropping prices forcing Verizon and AT&T to follow suit and thinking years down the road 6G?

    • marque2

      Ding ding ding ding – we have a winner!

  • justanormalguy13

    I love how they keep just taking a dump all over Sprint to prove that this merger is necessary for Sprint’s survival. If for some reason this doesn’t go through, there’s no way Sprint will survive on it’s own. It’s assets will be sold at firesale prices.

    • Sharti24

      Maybe Dish would buy Sprint

      • Mike

        Why would Dish buy Sprint? They’re steady losing customers each quarter. No one will buy Sprint to keep it running. TMobile has been adding customers each quarter and Sprint spectrum is the only thing tmobile wants at the end of the day. If the merger fails Sprint will end up filing bankruptcy and before you know it they’ll be force to auction off Spectrum then you’ll have AT&T and Verizon bidding.

        • Sharti24

          Then sprint should say “if the merger isnt approved then we’re filing for bankruptcy” that should help push the merger through

        • Kevin

          They are using the failing firm strategy. We seen this before with TMobile and Att.

        • Ryaniskira

          Except in this case there’s no breakup payout. The only reason T-Mobile made it was due to the terms of the merger stating that AT&T had to payout $4b to T-Mobile in cash and spectrum if it failed. This merger has no such clause.

    • Kevin

      Someone else will buy Sprint, which is the best outcome for everyone. So we can keep competition alive.

      • marque2

        You should reread and think about what you write before hitting the post button. Your comment is a great example of illogic.

        • Marc

          His comment makes perfect sense.

        • marque2

          You need reading comprehension classes then.

      • Jose Mendoza

        We’re screwed either way. It’s been a plan since forever lol
        Either T-Mobile becomes like AT&T and Verizon, or Sprint gets absorbed by AT&T and Verizon. Welcome to the world where Board Members of these companies are in multiple of these companies. It’s called an artificial market lol
        But the people who expect a payout for their stocks will do ANYTHING like literally ANYTHING to earn an increase. Little do they know, every major company could easily pump and dump them so quick that they’d lose so much. Only in America, where stock trading has become a gambling problem.

        • marque2

          Hey there are several communist countries you can move to where you can relish I’m the life you so desire.

    • budabellyx

      Maybe that’s the plan. Force Sprint to sell off assets, allowing AT&T and Verizon to buy up what T-Mobile couldn’t acquire.

      • Ryaniskira

        That’s exactly it.

    • Keith Stevens

      Without a buyout sprint will be bankrupt in 5 years. Not to mention they do not have enough money to roll out upgrades in a timely manner. So its a disservice to customers of sprint. Letting customers get worse service year over year with the debt piling up faster and faster for sprint… is not competition. Sprint will not survive on its own. Period.

  • Ryaniskira

    Once this is all over can we bar these states from being able to file lawsuits for at least 20 years? All this is doing is putting the breaks on a strong 5G rollout. It WiLl ReDuCe CoMpEtItIoN but somehow allowing Verizon and AT&T to steamroll ahead of T-Mobile won’t?

  • Francisco Peña

    If this does not go through, then there should be a massive fine if ATT or VZW come in and take up Sprint assets if and when Sprint folds.