Dish, C Spire rally final push against merger of T-Mobile and Sprint

Files with paperwork
Paperwork continues to roll in related to the proposed merger of Sprint and T-Mobile.

As the public comment period closes on the FCC’s review of the proposed merger of Sprint and T-Mobile, opponents of the transaction are getting in their last shots.

“This transaction will lead to higher prices for tens of millions of consumers,” Dish Network wrote in a lengthy, and highly redacted, filing on the topic that takes aim at the underlying arguments that Sprint and T-Mobile have made that their proposed merger will lead to economic benefits for Americans. “American consumers cannot afford the increases that this merger will likely produce on top of these already high prices.”

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Dish—which is currently building a nationwide NB-IoT network and has plans for a nationwide 5G network—has been among the most vocal opponents of the transaction, having filed hundreds of pages of detailed economic analysis against the merger. But Dish isn’t alone. C Spire, a telecom operator with around 1 million wireless customers mainly in the Southeast, has also made its opposition to the transaction clear. “The public interest will be best served by a denial of the Proposed Transaction which, if allowed, will remove Sprint, the acknowledged low cost provider of wholesale services, from the market,” C Spire wrote.

In a filing detailing a meeting between C Spire executives and FCC officials, the company argued that it needs suitable roaming partners in order to remain competitive, and it urged the FCC to require that T-Mobile maintain the Sprint CDMA network for five years in order to support roaming services for C Spire and other operators.

And the Communications Workers of America (CWA)—which is among a number of organizations calling for House hearings on the merger—also filed comments with the FCC arguing that the transaction would eliminate thousands of jobs. “The CWA analysis finds that the proposed merger would result in the loss of 30,000 jobs. Approximately 25,500 jobs would be eliminated as a result of overlapping retail store closures at postpaid and prepaid locations. Another 4,500 jobs would be eliminated due to duplicative functions at corporate headquarters in Overland Park, KS and Bellevue, WA,” the association wrote.

Others, though, filed comments with the FCC in support of the transaction. For example, the mayor of Bellevue, Washington—where T-Mobile’s corporate headquarters are located—wrote that the merger would “unlock new opportunities for economic growth” including for 5G networks for smart city applications.

And, according to New Street Research, AT&T CEO Randall Stephenson said recently that he supports the merger of Sprint and T-Mobile without any conditions, though he clarified that he would not support a transaction that required the merged company to divest assets to AT&T competitors like Dish or Comcast. (Interestingly, it appears that Mexico’s America Movil may be interested in purchasing the prepaid operations of Sprint and T-Mobile if regulators forced the company to divest those businesses, according to recent comments from America Movil’s CFO.)

In comments at investor relations events this week, executives from Sprint and T-Mobile reiterated their belief that the transaction will ultimately be approved. “We are extremely respectful of the process and we've taken extraordinary measures to non-politicize this process,” argued T-Mobile CFO Braxton Carter, according to a Seeking Alpha transcript of his remarks. Carter added that T-Mobile CEO John Legere has been working with state public utilities commissions around the country in order to gain their support and has so far received support from more than half.

However, New Street Research noted that some states may take action against the deal. Specifically, the Wall Street firm pointed to merger review proceedings in New York and California that could catalyze opposition among Democratic states’ attorneys general.

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