Thursday, 13 June 2019 04:23

Ten US states sue to stop T-Mobile-Sprint merger

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Ten US states sue to stop T-Mobile-Sprint merger Pixabay

The backing of the US Federal Communications Commission's chair for a merger of wireless companies does not seem to be enough to push it over the line, with 10 state attorneys-general filing a case opposing the merger between the American companies T-Mobile and Sprint.

The case, filed in New York, claims that mobile prices would rise if the third- and fourth-biggest wireless outfits in the country were allowed to become one, The Wall Street Journal reported.

As iTWire reported, FCC chairman Ajit Pai gave his blessing to the deal in May. This came following national security clearance after both Deutsche Telekom, the majority owner of T-Mobile, and Sprint's majority owner, Japanese firm SoftBank, agreed to exclude Chinese telecommunications giant Huawei as a supplier.

Both companies also pledged to build 5G infrastructure in rural areas and sell off Sprint's Boost Mobile pre-paid mobile service.

New York attorney-general Letitia James told the media that if the deal went ahead, jobs would be lost, services would deteriorate and prices would rise. “The deal is bad for consumers, it’s bad for innovation, it’s bad for workers,” she said.

It is unusual for state officials to file legal challenges of this kind unless they are support by their federal counterpart.

T-Mobile and Sprint announced their proposed merger in April last year. Since then, the FCC has been provided with a huge amount of feedback from parties who have an interest in the transaction.

The US Department of Justice has yet to give its final word on the deal.

A previous effort to lessen the number of national US wireless operators down to three failed in 2011, when the Justice Department and the FCC both opposed AT&T's plan to buy T-Mobile, saying it would lessen competition.

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Sam Varghese

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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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