The future of the U.S. wireless industry hinges on a court battle kicking off Monday, a case that could end with T-Mobile US Inc. buying Sprint Corp., and Dish Network Corp. getting the go-ahead to enter the market.
The states, led by New York Atty. Gen. Letitia James and California Atty. Gen. Xavier Becerra, have the edge going into the trial, said Blair Levin, an analyst at New Street Research. He said they have the better argument: that the tie-up violates antitrust laws and that the proposed settlement — setting up Dish to become a new wireless carrier — doesn’t resolve the anticompetitive problems.That makes Dish Chairman Charlie Ergen the most important witness of the trial, Levin said.
Investors are increasingly pessimistic about T-Mobile’s chances of defeating the states’ case. The spread between T-Mobile’s offer price for Sprint and the trading price, an indication of the deal’s risk, hit a high Thursday. But even without those commitments, T-Mobile argues that buying Sprint will give it a massive increase in network capacity, which means a cost advantage in terms of delivering data, and a way to compete with lower prices.
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