Illinois joins a lawsuit to block the merger between T-Mobile and Sprint

Yesterday, Illinois became the 17th state to join the lawsuit to block the merger between T-Mobile (TMUS) and Sprint (S). Attorney General of New York Letitia James is at the head of 16 other attorneys general of states that oppose the agreement on the basis of antitrust concerns.

Critics take Illinois aboard

"With Illinois added to our lawsuit, more than half of the US population is now represented by states filing lawsuits to block the anti-competitive megameter of T-Mobile and Sprint," noted James. "We welcome Attorney General Raoul to our growing coalition, which now includes 17 Attorneys General, who have all opposed this merger, as it remains harmful to consumers, workers and innovation. "

Critics argue against this merger, believing that the union of the two telecommunication companies would reduce competition and unfairly benefit T-Mobile. However, even after the merger, T-Mobile is expected to remain in third place in terms of market share. Verizon and AT & T (T) are currently the two largest mobile operators in the country.

With new Sprint subscribers, Verizon and AT & T should feel more warmth from T-Mobile. T-Mobile, controlled by Deutsche Telekom, believes that the deployment of 5G would be much better provided that the merger gets the green light.

T-Mobile-Sprint merger remains uncertain

To address these antitrust concerns, the merging entities have agreed to transfer a portion of their assets to Dish Network (DISH). Dish would be the fourth largest mobile operator in the country, replacing Sprint.

The Department of Justice has already approved the proposed $ 26 billion merger between third and fourth tier wireless service providers. FCC President Ajit Pai also recommended the approval of the merger last month.

T-Mobile stated in particular that it would respond to the concerns of the attorneys general before concluding the contract. A trial must begin in December. For more information, please read T-Mobile and Sprint Deal in Peril despite the agreement of the FCC President.

Sprint concerns

T-Mobile highlighted Sprint's weakness in its response to the Attorney General's trial. A Bloomberg report of August 28 noted that "Sprint Corp. It is unlikely to become a serious competitor as a stand-alone mobile phone company in the coming years as it faces multiple financial challenges on many fronts. T-Mobile US Inc. said in response to a lawsuit by states seeking to block their merger. "

In its case, T-Mobile also noted that Sprint's "huge debt" and negative cash flow were significant concerns. In comparison, T-Mobile has expanded its subscriber base with its aggressive marketing strategies. To learn more, read why T-Mobile has partnered with Burger King.

Sprint has lost customers in recent quarters, resulting in financial stress. Michel Combes, CEO of Sprint, said in his report on the results of August 2: "Although we have achieved good results in the first quarter, we still face several structural obstacles and I remain convinced that the merger with T- Mobile is the best outcome for our customers, our employees, the industry and all stakeholders. "

To learn more, read Sprint's woes appear bigger amid the pending merger of T-Mobile.

T-Mobile and Sprint are valued at $ 66 billion and $ 27 billion, respectively. Verizon and AT & T are currently valued at $ 240 billion and $ 258 billion, respectively.

T-Mobile and Sprint shares have traded in a narrow range since last month. Both actions peaked at 52 weeks after being approved by the Department of Justice on July 26. Since the beginning of this year, T-Mobile shares have increased by 23%, while Sprint shares have increased by 15%. AT & T stock increased by almost 25% over the same period.