T-Mobile's Legere Heads to Washington to Tout Sprint Deal
(Bloomberg) -- T-Mobile US Inc. Chief Executive Officer John Legere will tell lawmakers Wednesday his company’s proposed purchase of Sprint Corp. will bring lower prices, while a former U.S. antitrust official will say the deal poses dangers from less competition.
Legere and Sprint Corp. Executive Chairman Marcelo Claure are among witnesses scheduled to appear at a hearing before the Senate’s antitrust panel as Washington begins to turn its attention to the $26.5 billion deal that would reduce the number of nationwide wireless carriers from four to three.
“We can take competition to new levels” and win customers from larger rivals AT&T Inc. and Verizon Communications Inc., Legere said in prepared testimony that was obtained by Bloomberg. "This merger is about being able to go toe-to-toe with them and all comers to provide aggressive, disruptive competition that is anything but the status quo."
Claure, in his prepared remarks, said Sprint had lost $25 billion over the past decade and “our path was simply not sustainable.” Sprint is “still are unable to spend at parity with Verizon and AT&T, much less catch up to their previous investments,” Claure said.
The deal, proposed in April, requires approval from antitrust authorities at the Justice Department, and from the Federal Communications Commission.
During the Obama administration, both agencies opposed the tie-up of the two companies, taking the position that competition would be hindered.
Sprint and T-Mobile may face an easier path today. President Donald Trump’s FCC chairman, Ajit Pai, has said he remains open about the number of major players in the U.S. mobile market, while the head of the Justice Department’s antitrust division, Makan Delrahim, said there’s no "magical number" for the number of competitors.
But the question of competition is still on the minds of the deal’s critics. “The last thing consumers need is fewer choices when it comes to their communications provider,” Gene Kimmelman, president of the policy group Public Knowledge and a former Justice Department antitrust lawyer, said in his submitted testimony for the Senate hearing.
“The behavior of companies depends not on famous CEOs or winning personalities but on the cold equations of economic analysis.” Kimmelman said. “This merger creates a high likelihood of coordinated effects — the risk that the prices, plans, and practices of AT&T, Verizon, and T-Mobile/Sprint would increasingly mirror each other.”
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