Closing arguments are scheduled to take place on January 15, with a decision to follow next month in the state attorneys general case against the T-Mobile-Sprint merger. T-Mobile is hoping to obtain Sprint’s mid-band 2.5 GHz spectrum so that it can increase the coverage and speed of its nationwide 5G network.
While some Wall Street analysts believe the judge will approve the deal, at least one prominent analyst does not, reports Phone Arena. Cowen & Co. analyst Paul Gallant believes there’s a 60 percent chance that Judge Victor Marrero will block the transaction.
The “states likely raised enough questions about [the] Dish fix and merger synergies to prevent Marrero from accepting them,” Gallant wrote in a client note.
The 13 state AGs and the one from the District of Columbia voiced concern that cutting the number of major wireless carriers from four to three will result in higher prices for consumers. Though Dish Network is setting up to become a nationwide wireless carrier, the state AGs argue that the satellite television firm has never sold wireless service before and cannot be counted on to replace Sprint, notes Phone Arena.
Other analysts disagree with Cowen, believing the highest hurdle has already been met, by getting approval with conditions from the FCC and the Department of Justice. Telecom, media, and tech analyst Walt Piecyk at Lightshed Partners believes the testimony of T-Mobile CEO John Legere, Dish Network Chairman Charles Ergen, and former Sprint CEO Marcelo Claure was enough to persuade the judge that after the transaction, the competitive balance in the industry will remain the same.
Piecyk was impressed with Ergen’s testimony, according to Fortune. “Many investors believe that the case hinges on Charlie Ergen’s ability to establish himself and Dish as a viable and credible fourth wireless competitor,” he wrote to clients. “We believe he did that…under cross-examination. Our optimism continues to grow about T-Mobile’s ability to prevail.”
Raymond James’ Ric Prentiss expects the judge to rule in favor of the merger. However, the analyst told clients that he has “lowered our odds of deal approval probability from 85 percent to 55 percent.” Prentiss noted that nothing took place during the trial that would have made a decision easier for the judge to make either way.
January 7, 2020
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