Just a little over a week before closing arguments are made in its fight to merge with Sprint, T-Mobile—as one might expect—is confident it will prevail.
During a Citi investor event on Tuesday, T-Mobile President and COO Mike Sievert said internal and external lawyers for T-Mobile, Sprint, SoftBank and Deutsche Telekom have done a tremendous job making their case.
“We know we have the right case. Right is on our side,” with the merger resulting in a more competitive market with lower prices and better products, he said. “I think our team did a phenomenal job,” making the case and backing it up with facts.
Analysts at Wall Street firms like New Street Research who have been attending the trial in New York have said it’s a close call regarding which side is going to emerge as the winner. While closing arguments will be held next week on Wednesday, Judge Victor Marrero, a Democrat, has asked questions throughout the trial that didn’t signal a clear preference to either side. The New Street analysts as of early this week were still giving an edge to the states, but they also said they would reassess after hearing the final arguments.
Last week, Cowen analyst Paul Gallant said the states likely met their mandate to show the merger is presumptively anticompetitive, and he’s giving the states a 60% chance of prevailing. However, LightShed Partners analysts are hedging their bets on the companies, saying the state AGs so far failed to make a compelling enough case that justifies a district court judge effectively overruling the decisions of two federal agencies.
The difficulty in calling a winner in the case was demonstrated via a survey conducted during Citi’s conference Tuesday when T-Mobile executives took the stage. The audience was surveyed: Will Sprint and T-Mobile complete their merger? The results indicated 37% felt “yes without additional concessions/divestitures,” while 30% said yes with additional concessions. Another 33% said “no.”
Sievert joked after the results were announced that it was “kinda boring,” like the weatherman telling you there’s a 50% chance of rain. “Do you bring the umbrella or not?”
Jokes aside, Sievert said they’re anxious to see the judge’s verdict, and reiterated they feel confident that “right is on our side.” Settling with the states—more than a dozen state Attorneys General are opposing the deal—is always a possibility, but he gave no indication that anything is imminent on that front.
He noted that 19 states have spoken out for the merger, and some were former litigants with the opposing states, which are led by New York and California in what’s become a highly partisan debate. The Democratic commissioners on the Federal Communications Commission (FCC) voted against the transaction, and raised questions about the process, and the states remaining in the litigation are led by Democratic AGs.
“We’ve been very clear all along,” in terms of what T-Mobile is willing to do and not willing to do, and keeping the value of the company top of mind, according to Sievert. So far, there hasn’t been a settlement, but “you never say never,” he added.
T-Mobile made headlines last month when it launched its nationwide 5G network using 600 MHz spectrum acquired in the incentive auction. It had planned to launch in 2020, but it was able to accelerate the timeline, and it did so by launching with two 5G phones capable of using its 600 MHz.
T-Mobile wants to offer a world-class 5G network. The breadth is coming along and the depth will be realized with the 2.5 GHz spectrum it hopes to get by combining with Sprint, according to T-Mobile President of Technology Neville Ray.
“I want to be sitting here this time next year with you talking about this tremendous network which is literally kicking the ass out of AT&T and Verizon, because their plans cannot match what we can do with the combination with Sprint. We’re ready to go,” Ray said.