Sprint and T-Mobile’s proposed $26 billion merger has been approved by a federal judge on Tuesday. Sprint’s stock prices soared by 70% as investors celebrated the long-awaited merger of the two telecom giants.
For years, the third- and fourth-largest wireless carriers have been attempting to merge, and now both companies will be under the same umbrella.
First, this merger will mean that there will be three telecom companies of roughly equal size battling for the cellphone market in the US. The new T-Mobile, along with AT&T and Verizon, will be the main combatants in that arena.
US District Court Judge Victor Marrero, the judge who handed down the ruling, said that he didn’t expect the new T-Mobile “would pursue anticompetitive behavior.” He dismissed lawsuits from numerous states that argued the new company would stifle competition.
Dish Network plans to take this merger as an opportunity to present themselves as a new telecom competitor. This, in turn, could mean a shakeup for the cellphone provider industry. Dish also owns and operates TV streaming company Sling. The company could offer Sling as a bonus for using their cellphone service.
Judge Victor Marrero explained that part of his ruling was due to the current position Sprint holds in the market. Marrero stated that he thinks it would be difficult for Sprint to “continue operating as a strong nationwide competitor.”
Sprint has been number four in the nation for some time. The network has been rapidly losing customers and could be slipping from fourth place altogether soon.
The judge disparaged arguments from state attorney generals who were prophesying doom and gloom. He also dismissed Sprint and T-Mobile’s overly-rosy outlook.
“How the future manifests itself and brings to pass what it holds is a multifaceted phenomenon that is not necessarily guided by theoretical forces or mathematical models,” Marrero stated in his judgment.
T-Mobile CEO John Legere stated that this ruling was both a “huge victory,” as well as “great for consumers and great for competition.” Time will tell if these predictions come true.
