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T-Mobile Flips Colorado in Pursuit of Sprint Merger

Mike Dano
10/21/2019

And then there were 16. That's the number of states that continue to oppose the proposed $26 billion merger between Sprint and T-Mobile following the decision of the Colorado state attorney general to reverse course and support the merger.

The turning point? Dish Network, which is based in Colorado, promised to maintain the headquarters for its wireless business in Littleton, Colo., employing at least 2,000 people there, and to make Colorado one of the first states to host its promised 5G network. To sweeten the deal, T-Mobile also said it would provide the low-cost mobile service plans that it also promised to offer in Mississippi to gain that state's support for the merger.

"The State of Colorado joined a multistate lawsuit to block the T-Mobile-Sprint merger because of concerns about how the merger would affect Coloradans. The agreements we are announcing today address those concerns by guaranteeing jobs in Colorado, a statewide buildout of a fast 5G network that will especially benefit rural communities, and low-cost mobile plans," Chief Deputy Attorney General Natalie Hanlon Leh said in a statement. "Our announcement today ensures Coloradans will benefit from Dish's success as a nationwide wireless competitor."

The analysts at Wall Street research firm Raymond James noted that 16 state attorneys general (15 Democratic and one Republican, in Texas) still remain opposed to the merger. The firm said nine state attorneys general (seven Republican and now two Democrats, in Mississippi and Colorado) now formally support the transaction.

"We continue to believe this is a very political process and expect additional settlement talks and potential concessions ending with significantly less states remaining on the lawsuit by the time it starts December 9," the Raymond James analysts wrote in a note to investors.

Why this matters
The opposing lawsuit by the 16 state attorneys general is the last major obstacle that T-Mobile faces in its quest to merge with Sprint. The company has already obtained approval from the US Department of Justice (thanks to its agreement with Dish that positions the company to take over Sprint's position as the nation's fourth big wireless provider) and from the FCC's three majority Republican commissioners.

Just last week, after making some specific promises to Mississippi's attorney general, the company flipped that state to its side.

However, New York's attorney general said her lawsuit against the transaction remains unaffected by the reversals of both Colorado and Mississippi. "We remain committed to challenging this merger, and have continued to develop strong evidence that it is bad for consumers, bad for workers and bad for innovation," New York State Attorney General Letitia James told Reuters, arguing that Colorado's new deal doesn't fix the "nationwide harms" created by the merger.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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