T-Mobile-Sprint merger likely to be blocked by judge, say analysts at Cowen


As we wait for the final arguments in the T-Mobile-Sprint merger trial, there’s a lot of speculation about how each side did with their arguments and who Judge Victor Marrero might rule in favor of. A new analyst report came out today that says that the states might come out on top.

Cowen analysts believe that Judge Marrero will rule in favor of the state attorneys general and block the merger. “After watching the witnesses, evidence, and Judge Marrero’s questions, we continue to believe the state AGs are likely to prevail. We assign a 60% chance of this happening,” the analysts said, according to Light Reading. They added that they don’t expect T-Mo and Sprint to settle with the state AGs.

The analysts said that the state AGs “very likely” showed that T-Mobile and Sprint’s merger is anticompetitive by arguing that the U.S. wireless market is highly concentrated by marketshare and that the merger would make it even more concentrated. They also said that the questions the judge asked suggested that he didn’t believe T-Mobile’s argument that MVNOs can be considered competitors in the market.

It’s also argued that Judge Marrero wasn’t convinced that Dish can replace Sprint as a viable fourth U.S. carrier. The analysts believe it will take Dish four years to cover 70% of the U.S. population and that it will remain smaller than Sprint for the foreseeable future.

Finally, the Cowen analysts say that Judge Marrero is likely to rule in the states’ favor because he’s a Democrat and the lawsuit is “highly partisan” because it was brought by Democratic Attorneys General and is supported by FCC Democrats.

The T-Mobile-Sprint merger trial began on December 9th and testimonies wrapped up on December 20th. Some interesting tidbits about T-Mobile, Sprint, and Dish came out during that time, like John Legere confirming that T-Mo and Dish nearly merged in 2015 and Dish teasing that it’s held talks with “very exciting potential strategic partners” that it could work with to develop a more competitive product.

The FCC and DOJ reiterated their support for the merger last month, too. They argued that blocking the deal would undo the benefits gained by the government during its review of the T-Mobile-Sprint merger, such as improved rural coverage in parts of the country.

Final arguments in the merger trial are scheduled for January 15th. It’s believed that Judge Marrero could issue a ruling in February.

Source: Light Reading

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  • Christopher Lee Sims

    Let’s hope they really do allow the merger cause after all this time I don’t see Sprint going anywhere except for further down the drain. A merger would be for the best for everyone involved since Sprint can hardly compete on a national scale when you compare them to all the other players in the game.

    • Aaron a

      Sprint actually has more of a chance than TMobile. If the merger doesn’t happen. You say further down the drain have you not followed the merger plans? Sprint will basically run new TMobile. John is gone in 2020 no matter the merger outcome. TMobile can’t offer true 5g without the merger TMobile will only have it’s 5ge clone with it’s fake 5g logo. This will hurt TMobile a lot and people will leave to the leading 5g carrier and that is Sprint . It’s only up from here Sprint already has the most reliable 5g out of the carriers offering true 5g. You will say well Sprint is losing money that’s true but the owner of Sprint has deep pockets and I say it would only take Sprint 5 years to pass TMobile if the merger doesn’t happen. And that’s because Sprint is in the best spot when it comes to 5g

      • mikkej2k

        The facts do not support this post. T-Mobile has REAL 5g nearly nationwide with their low band frequencies.

        Sprint’s owner has deep pockets but at this point Sprint may be more valuable if the frequencies it holds are sold off and the companies other assets are parted out.

        • Jason Caprio

          600MHz 5G-NR will only average around 60 – 70mbit/sec. Pretty much good LTE speeds and that’s with a full signal. True fast gigabit 5G requires mmwave. T-Mobile is all hype until you read the fine print.

          5G is in it’s infancy at the moment, so all this hype about it is ridiculous. 5G won’t be mature for at least another few years.

          “Neville Ray suggested that 600MHz 5G would “move from the 30-35 [Mbps] averages that exist in the network today into the 60s and 70s,” with peaks “probably not quite doubling where we are today, but into the hundreds of megabits per second” — assuming the device can aggregate the carrier’s low-band spectrum with some of its mid-band spectrum.” I read in an article about 600MHz speeds. (Not posting link because it takes days to get approved on here)

        • Acdc1a

          It’s all about capacity. 30-35 real world with almost infinite capacity is acceptable, especially if it provides competition to wired connections to the web.

        • Aaron a

          Att releases 5ge which is 4g advanced technology. Sprint was doing this for years now. It’s massive Mimo with one lte signal. So TMobile decided to release 5g with 1 signal and massive Mimo . Manufacturers of 5g equipment delayed providing their equipment to TMobile because of the 1 spectrum release. 5g requires 2 spectrum. TMobile choose to only use one spectrum which is basically the same as att 5ge. It’s a lie from TMobile. Carriers are not movements they are carriers. I don’t make the technology I’m just stating that TMobile is misrepresenting 5g. 5g has a lot of lte technology that is why I’m calling it what it is. Put lipstick on a pig it’s a pig everyone gets triggered when i see TMobile 5g is exactly the same as att 5ge network. Only difference is TMobile is using slower spectrum… I have a 600mhz phone it’s not magical I have TMobile and I will switch once the merger happens to dish Network. I don’t like being lied to. I also hate TMobile fan boys. It’s a god damn carrier you pay TMobile money for service it’s not a movement. It’s not a club it’s not something to really go and froth at the mouth about. It’s a carrier that lies to make money off people that think they are actually launching something but they aren’t the can use 5g equipment but they are only using the 4g lte standards in it with Mimo. Until they actually start using more spectrum it’s a massive misrepresentation of what is being given. 600 MHz isn’t magical and it’s not that fast. I actually have better speeds on 700mhz. I just wish people would understand the technology before coming at me with blind retardation.

        • marque2

          TMobile and the others had choices to make about how to implement the new networks. They all will need lower band and very high band to make the system work. The others chose the higher bands first TMobile chose the lower band – which will make 5g available sooner. TMobile also has tons of 33GHz spectrum they plan to develop as well.

          In the end everyone will implement everything – but because of the Tmo choice Tmo customers will truly get full 5g coverage first.

        • George B

          Jason, in my opinion, 5G hype is out in front of reality at both T-Mobile and AT&T. Higher download speed misses the point since 4G is fast enough to use your monthly data in minutes to hours. Neither is deploying Standalone 5G NR that can deliver the big latency advantages that 4G LTE Advanced Pro can’t. However, AT&T deserves all the ridicule it received for calling 4G LTE Advanced Pro “5GE” while T-Mobile can show significant progress toward 5G NR being available everywhere.

        • Aaron a

          Ya fake 5g go fan boy cuz bro 600mhz is the slowest spectrum. Aka FAKE. ALSO USING ONLY ONE BAND IS NOT TRUE 5G FAN BOY. AND JUST USING MASSIVE MIMO THIS MEANS ITS A 5GE CLONE FAN BOYS

        • marque2

          I would suggest it is 5g but the gigahertz speeds we were told about were a bit oversold by everyone. The speeds won’t be fantastic but at least the service is there and the low latency of 5g and transmission efficiency are all being taken advantage of.

      • Francisco Peña

        like ATT’s “5G E” being 5G? lmfao.

        Sprint was firmly in 3rd place over TMo… now they are way back in 4th. Sprint’s “owner” has deep pockets, but not all owners reach in those deap pockets to hand out cash. You forget that sometimes, in business, its just as good to break even, or lose some money, so they can write that off as a loss, and sell for more.

        Sprint won’t pass TMo anytime soon on their own. They’ve been in a death spiral for years, and Softbank hasn’t bailed them out to get them in a place to beat TMo. You are delusional if you think Sprint is coming back strong.

      • Sean Sorlie

        The level of ignorance in this statement is staggering.

        • Aaron a

          I didn’t make the standards fan boy. This is a straight clone of att 5ge

        • Phone Guy

          WRONG again. Sigh.

        • Jay Holm

          Exactly!!! “NR” antenna’s are being used, hence the legitimate 5G.

        • SirStephenH

          You don’t make the standards and you apparently don’t know the standards either.

          What T-Mobile has deployed and declared as 5G is 100% 5G according to the standards. What your referencing as 5GE is only deployed by AT&T and is in fact LTE Advanced. The big giveaway is that T-Mobile’s 5G requires a 5G modem to use while AT&T’s 5GE will work with any LTE capable modem.

        • JG

          T-Mobile’s 5G network is NOT a clone of AT&T’s 5GE.

          AT&T’s 5GE network is simply their LTE-A network that they have been broadcasting for years rebranded. All they did was send an update to customer’s phones swapping out the LTE-A graphic for one reading 5GE. It was nothing more than a marketing department lie trying to trick customers into thinking they magically got 5G first.

          T-Mobile, on the other hand has actually gone out and upgraded their radios to broadcast a true proper 5G signal.

          Yes, T-Mobile is relying primarily on their 600Mhz spectrum for 5G and because of this, their 5G network will only be capable of producing LTE-like speeds. While Verizon and AT&T (on their actual proper 5G network) are focusing on mmWave which can produce crazy multi-Gbps speeds…But while low band has slow speeds, mmWave has horrid penetration abilities. They can’t even cover an entire football stadium with their mmWave 5G!

          Would I like to have 2Gbps on my phone on a slow day? Sure… But I would prefer having the ability to move about and not have to stand on one specific sidewalk square in order to keep a 5G connection.

        • marque2

          I believe TMobile plans to use 33 GHz for 5g as well but as the other networks have shown the attenuation is so great it won’t work indoors from an outside source. TMobile went the other route and decided to implement 5g that could be used most anywhere and would backfill the 33GHz later.

      • Phone Guy

        Sorry. it may be slower, but it is real 5g. Nice try. Please do research before inserting foot deep in mouth.

    • Willie D

      Coincidentally the same thing was said about TMobile if it didnt merge with AT&T. Look at TMobile now… bigger and stronger than before, though a far way from where Red and Blue are. Sprint is being touted the same way, will die without a merger from a bigger company. Let’s also be realistic, this isnt a merger (very few mergers are actually mergers, and are incorrectly labeled as such), this is a straight up acquisition. They’re taking the whole company and selling scraps to Dish. That’s taking out a competitor. Alltel was done this way as well, with majority of its parts bought by Verizon and the scraps thrown to AT&T. That was no merger, that was straight up death to an otherwise extremely loved and successful mega regional carrier, and vast majority of customers saw price increases, limited rate plans, and probably congestion in many major areas. Why is this being pawned to FCC and consumers as being a good thing.

      What Sprint and TMobile should do is network sharing and it needs to be reciprocal. No more of Sprint roaming solely on TMo while they figure it out. Both should share the new 5G builds via spectrum and money.

      • Robert Roll

        should also take note that when the AT&T and T-Mobile merger failed there was also a breakup clause where AT&T had to hand over Spectrum and Cash to T-Mobile US/Deutsche Telekom which they was able to use and turn T-Mobile around. no such clause if Sprint and T-Mobile dose not merge. but having a reciprocal roaming agreement between T-Mobile and Sprint would be a good alternative if they can hash out a beneficial agreement between the two parties.

        • Willie D

          Yes there was a massive breakup fee, but AT&T and TMobile both were acting as if TMo would be for sure dead and AT&T wouldn’t have rural coverage, if neither merged together. Pretending like the breakup fee was insignificant enough that TMo couldnt turn around was a flat out lie. In this case Sprint actually has cash, its within its massive 2.5Ghz spectrum allocations that could be sold to TMo AND Dish, which could keep Sprint afloat and give them cash to rebuild itself in the same way TMo was able with someone elses cash and spectrum aka AT&Ts. Basically repeating itself.

        • Augustine

          Sprint doesn’t have a lack of spectrum.

      • Mschmal

        You are forgetting that T-mobile got a $2 billion breakup fee from AT&T when the merger failed.

        • Augustine

          That’s just a quarter’s worth of capital expenditure.

        • marque2

          And roaming rights on AT&Ts network. Not sure if 2 bill merely a quarter of cap expenditure in 2010. Also not the total value of.concessions given to Tmo was valued at 6 billion. Very nice shot in the arm for the then very small 4th place network.

    • George B

      The other alternatives are that Sprint sells some spectrum to T-Mobile to raise cash or Sprint does nothing and continues to be held back by debt. Presumably T-Mobile is willing to pay significantly more to acquire Sprint all at once vs. buying a big chunk of Sprint 2.5 GHz spectrum now and leaving a smaller Sprint in place.

  • Sammie Bell

    No merger with Sprint!!!! Let the chips fall where they may. This talk about merging will come up time & time again with Tmobile. Ultimately, Tmobile will either be sold off because Deutsche Telekom really doesn’t want to be in the U.S. market anymore or find another company to merge with. John Legere has done a magnificent job making Tmobile profitable but it isn’t enough for Deutsche Telekom. Mark my words…Tmobile will be gone before the next decade(2030).

    • RealLifeJasonBourne

      So then we’ll be down to two carriers (because Sprint just ain’t gonna make it). Sounds like a great plan. /s

    • Phone Guy

      T-Mobile USA is now their most successful division worldwide. Why would they want to dispose of it now, unlike when it was losing money. That would be bad bad business.

      • Jay Holm

        That person obviously doesn’t know what they are talking about…

      • Sammie Bell

        New c.e.o for TMobile this year and by the end of the decade TMobile will be back to where it was before John Legere took over. Wait and see my friends. As for ONLY 2 major wireless carriers, that won’t happen. New wireless carriers will emerge. TRUST!

        • Phone Guy

          So I guess the will give up their market share, close down the thousands and thousands of towers they installed to increase their foot print. Zero chance they will be back there. Where do you get these ideas? They may get better or weaker, but they can not go back where they were. Economics 101—Not housewife 101. Nice try.

        • Sammie Bell

          Hey, I’m just calling it how I see it. No need to get so defensive about my opinions. Like I said before and I’ll say it again, Tmobile won’t be around by the end of the decade. Not to say the infrastructure that was created will be torn away but used by another company instead of Tmobile. It’s people like you that cry about what happened when others like myself told you it would happen. I’ve seen many businesses that were successful one minute and then the next minute turn around for the worst. So don’t be surprised when I come back to this website and tell ya ass I TOLD YOU!!!

  • randian

    Interesting that the AGs think this merger makes things more concentrated. It’s almost as if they’re being paid by AT&T and Verizon to bring this suit. What do they think will happen to market concentration when AT&T and Verizon split Sprint’s carcass following its inevitable bankruptcy?

    • fentonr

      Pretty sure AT&T at least came out and said they’re not opposed to the merger. I thought Verizon had too, but I could be wrong on that.

      • randian

        What else could they say publicly? I don’t for a second believe it’s their real position, they have too much to gain if the merger falls through and Sprint descends into bankruptcy.

  • truthcopy

    This prediction is more about getting the analysts’ name in the news (mission accomplished) than it is any substantive prediction about the judge’s pending decision.

  • Bryck

    I totally don’t believe in this news.

  • riverhorse

    Ain’t no stoppin’ us now, McFadden & Whitehead are standing by.
    Followed by Annie Get Your Gun: the sun’ll come out tomorrow, bet your bottom dollar, that tomorrow, there”ll be sun. Just thinking about tomorrow, clears away the SNOWFLAKES, and the sorrow, ’til there’s none.
    And waiting in the wings…. THE SUPREMES!!!!!!!!!!!

    • riverhorse

      IF , huge IF , present judge rules against , on appeal that gets rectified. Higher courts are not packed with pro big gov / anti capitalism warriors.

      No need to soil diapers, like the New Year’s Eve Times Square reveler(anyone exiting for break not allowed back, stuck in spot sardine-style in freezing cold over 12 hours…most everyone knows to pretape themselves).

  • Robert Roll

    was another news posting on Fortune you can search for it that another Analysts predicts the judge will likely approve the merger. so until the judge issues his final ruling it could go either way.

  • Timbo1

    Typically these analysts just talk out of their ass and have no idea what they are talking about.

    • MrT

      Funny thing, there is another article publicized today, and it says the opposite, that an analyst thinks that the merger is going to approved by the judge. :D

  • PC

    Have the American people forgotten that SoftBank CEO Masayoshi Son has a controlling interest in SoftBank and he IS friends with Trump?

    Let Sprint fail.!! Why should the rich be afforded to recoup a bad investment and let him merge with T-Mobile? Do we everyday hardworking taxpayers get any refund on bad investment choices? ABSOLUTELY NOT!!

    So let’s be real and let Sprint FAIL!! This is not a political blast but a dash of reality. Where are these jobs they are promising? NOWHERE, because they are trying to say that jobs will be created AFTER the approval.

    Vote NO & DENY on this travesty of justice. Just in case you don’t know Sprint uses (CDMA) technology (old tech) like Verizon and T-Mobile (GSM) uses same technology as AT&T!!

    T-Mobile when spend several millions $$ to upgrade CDMA to GSM!! Where is the savings? Nowhere because you will be hit in the pocket with these phone calls from unknown callers using your minutes to contribute to rising costs!! Each minute of these calls takes away from your pocket and goes to fund the merger.

    • MrT

      If they don’t merge, then we in rural less likely to get Internet. Sprint told T-mobile that if they want to merge, they have to massively start providing Internet to people living rural. Yeah, I’m sure city residents don’t care, but there are tens of millions of people who don’t live in cities and large towns.

      • MrT

        So… I got 2 downvotes, because I live in rural and I’m hoping for normal speed Internet? Okay….

    • riverhorse

      Save your hard earned money, with those critical sthinking kills and asssorted philosophies displayed, the next raise will not be arriving in a long time.

      • marque2

        It is pretty incoherent and the CDMA barely applies – everyone is mostly 4g now and dismantling obsolete CDMA and older versions (pre 4g) of GSM.

    • marque2

      CDMA is so old it is barely used. I believe Verizon and Sprint were planning a permanent dump this year. Most if not all their calls are 4g. Just need to get phones with both Sprint and T-Mobile 4g frequencies.

      As for your Trump stuff – that seems stupid as well. Rich people didn’t get rich by throwing more good money after bad and there is little Trump can do to give Sprint federal dollars. It is just a TDS argument. I hate Trump – Sprint guy may have met Trp once – therefore dump on Sprint because I hate Trump.

    • JG

      The whole CDMA vs GSM thing isn’t that big of a deal, really…

      A lot of phones are carrier unlocked and have the hardware needed to operate on all of the major networks. It doesn’t matter, for example, if I put a T-Mobile or Sprint SIM into my Pixel phone it’ll work fine on either network. These phones, at most, will need a software update and/or a new SIM card to tell it to switch over.

      Plus T-Mobile already has experience with the conversion. When they bought it, MetroPCS was a CDMA network. They managed to get it converted over to GSM in like 3 years. Sprint is slightly larger but I’m sure they’ll be able to handle it…

      Especially considering Verizon and Sprint have, for awhile now, been working on retiring their CDMA networks. Sprint has been less vocal about their timeline, but for reference, Verizon started selling devices without CDMA radios in the summer of 2017 with the LG Exalt LTE flip phone. In the summer of 2018 they stopped allowing new CDMA only devices to be activated on their network. And Verizon planned to have their CDMA network totally down by the end of 2019. I’m not sure how well they succeeded there (I haven’t seen any articles about it one way or the other)…

      I know they were boasting a few years back that some 70% of all calls on the network were going through their VoLTE system, meaning for the vast majority of people, they were already CDMA free.

    • George B

      Sprint, T-Mobile, US Cellular, C Spire, and other companies have been working together for several years under the Competitive Carrier Association Device Hub umbrella to deploy phones that can work on each other’s networks. That’s a major reason why it’s relatively easy for T-Mobile to put Sprint customers on the T-Mobile network. In addition, the 2G CDMA vs. GSM divide no longer applies now that both sides chose LTE for 4G and NR for 5G. Merger or not, customers will be moved to 4G LTE and remaining 2G and 3G networks will be shut down so the spectrum can be reused for 4G or 5G.

  • fentonr

    “It’s also argued that Judge Marrero wasn’t convinced that Dish can replace Sprint as a viable fourth U.S. carrier“

    The problem with this statement is that Sprint isn’t a viable fourth carrier.

  • MissedCall

    There are other analysts (see other coverage on this, for example from Fortune, selectively not being reported upon here) who are suggesting the exact opposite of Cowan. There’s more of a suggestion by Fortune that Cowan may actually be an outlier in its analysis.