T-Mobile Cites Sprint Woes as Reason For Court to Clear Merger

(Bloomberg) -- Sprint Corp. is unlikely to be a meaningful competitor as a standalone wireless company in the coming years because it’s struggling financially on multiple fronts with no end in sight, T-Mobile US Inc. said in response to a lawsuit by states seeking to block their merger.

Sprint has been steadily losing subscribers and market share, while struggling with a “huge debt load” and cash flow that’s been overwhelmingly negative, T-Mobile said in a court filing Wednesday in Manhattan.

“Plaintiffs’ prediction that Sprint would abruptly reverse this long trend and emerge as a vigorous standalone competitor is nothing more than wishful thinking,” T-Mobile said. “Plaintiffs are dwelling in the past while the rest of the world is building super highways.”

The T-Mobile-Sprint combination won’t stifle competition and raise prices as more than a dozen states claim in their antitrust lawsuit, the phone company said. The state attorneys general say the merger will hurt consumers and kill jobs. A trial is scheduled for December.

T-Mobile and Sprint won approval from the U.S. Justice Department’s antitrust division after agreeing to sell assets to Dish Network Corp. Even after the deal was approved, more states joined the lawsuit, including Texas and Oregon.

The states said in court filings that the Dish deal, intended to create a new rival in the market and preserve competition, was a “fig leaf” that wouldn’t really help consumers.

New York Attorney General Letitia James’s press office didn’t immediately respond to a request for comment.

To contact the reporter on this story: Erik Larson in New York at elarson4@bloomberg.net

To contact the editors responsible for this story: David Glovin at dglovin@bloomberg.net, Joe Schneider

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