Possible T-Mobile/Sprint Merger Benefits

Sen. Mike Lee (R-UT) sent a letter to the Department of Justice and Federal Communications Commission highlighting testimony presented at the June 27, 2018 hearing on the proposed T-Mobile US and Sprint merger. The letter draws the agencies’ attention to important issues raised by witnesses appearing at the hearing, including the resulting increase in market concentration in the wireless telecommunications industry, and the potential for the merger to create a more competitive wireless carrier. In particular, the letter addresses the potential for significant efficiencies that would benefit consumers. 

“Perhaps the key argument the parties have made in support of their proposed transaction is that by combining their particular spectrum and infrastructure assets, the merger will increase the combined firm’s capacity. According to T-Mobile and Sprint, this resulting expansion in capacity would provide the merged firm with incentives to lower prices to attract customers. Such efficiency claims, if supported by verifiable evidence, suggest the merger could, on the whole, benefit, rather than harm, consumers. However, I recognize that merging parties are often unable to provide evidence supporting such claims, as Sprint itself alleged in its challenge to AT&T’s earlier attempt to acquire T-Mobile.”