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T-Mobile US Inc. and Sprint Corp.’s proposed $26.5 billion merger could actually help competition, rather than harm it, the Senate’s top Republican on antitrust issues said Aug. 7.
Testimony presented at a Senate hearing in June suggests that the deal might create a more competitive wireless carrier that would be better positioned to take on Verizon Communications Inc. and AT&T Inc. in the future, Sen. Mike Lee (R-Utah) said in a letter to the Justice Department, which is reviewing the deal.
“According to T-Mobile and Sprint, this resulting expansion in capacity would provide the merged firm with incentives to lower prices to attract customers,” said Lee, who leads the Senate Judiciary Committee’s antitrust subcommittee.
The letter comes a day after Reuters reported that DOJ officials believe at least three wireless carriers are needed in the U.S. to facilitate competition. The combination of Sprint and T-Mobile would reduce the wireless carrier market from four providers to three. Since announcing the deal in April, Sprint and T-Mobile have said their merger is necessary to bring about 5G, the next generation of wireless technology.
“Such efficiency claims, if supported by verifiable evidence, suggest the merger could, on the whole, benefit, rather than harm, consumers,” Lee’s letter said. “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.”
Sprint CEO Marcelo Claure and T-Mobile CEO John Legere defended the merger at a June 27 subcommittee hearing amid competition concerns. Sen. Amy Klobuchar (D-Minn.), the subcommittee’s ranking member, is among Democrats who have called on the government to carefully review the transaction.
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