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


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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