9 States, D.C. File Lawsuit Aiming To Block T-Mobile-Sprint Merger

The lawsuit states that the telecommunications tie-up would “decrease competition in the retail mobile wireless telecommunications services market and increase prices that consumers pay for mobile wireless telecommunications services.”

Nine states, including New York and California, as well as Washington D.C. on Tuesday filed a lawsuit to block the proposed $26.5 billion merger between telecommunications giants T-Mobile and Sprint, warning that the mega-merger would decrease competition and raise prices on consumers.

The complaint, filed in New York federal court in coordination with Colorado, Maryland, Michigan, Mississippi, Nevada, Virginia, and Wisconsin alleges that the merger of two of the four largest national mobile network operators would “decrease competition in the retail mobile wireless telecommunications services market and increase prices that consumers pay for mobile wireless telecommunications services.”

The complaint states that Sprint, T-Mobile, Verizon and AT&T control mobile networks that serve at least 90 percent of the U.S. population. “T-Mobile and Sprint are the third and fourth largest MNOs [mobile network operators] in the United States and serve approximately 80 million and 55 million customers, respectively,” according to the complaint.

[RELATED: T-Mobile-Sprint Deal Could Happen If Amazon Takes Boost Mobile]

According to the complaint, the merger could cost Sprint and T-Mobile subscribers “at least $4.5 billion annually” and the cost to retail mobile wireless telecommunications subscribers “could be even larger.”

“The merger will also negatively impact the entire ecosystem of businesses and significant segments of the American economy that depend on mobile wireless telecommunications services,” the complaint states.

According to reports last month, Amazon is considering buying Boost Mobile, which is currently one of Sprint’s prepaid wireless brands, as a way to appease regulators and push the giant merger ahead. The sale of Boost Mobile could fetch up to $3 billion and would allow Amazon to use the combined T-Mobile and Sprint wireless network for at least six years, the reports states. Amazon is also reportedly interested in any wireless spectrum that could be divested.

Ajit Pai, the chairman of the Federal Communications Commission, has said he would back the deal, but the agency has not approved the deal yet. The U.S. Department of Justice met with Boost Mobile’s founder last week to resolve any competition concerns the U.S. has about the telecommunications tie-up, Bloomberg reported.

Representatives of T-Mobile and Sprint did not respond to a CRN inquiry by press time. CRN has also reached out to the DOJ for comment.

Sprint’s stock declined more than 4 percent on Tuesday afternoon to $6.69 per share.