Closing arguments should occur next week, which has so much attention. This, for the group of state attorneys general’s case against the $26 billion T-Mobile-Sprint merger. Analysts could seeing the decision going either way, reports Inside Towers. The court’s decision should happen next month.
The T-Mobile Sprint case in a nutshell
In this case, a group of state attorney generals have argued that a T-Mobile-Sprint merger would make the industry less competitive. As the merger would only leave three major wireless carriers. The plaintiffs stated that they believe the lack of competitive balance would cause mobile phone users’ costs to increase. However, Dish Network has recently decided to build its own wireless network. T-Mobile and Sprint have argued that Dish’s presence would solve the missing fourth carrier concern. The state attorneys general group remained unconvinced, as they don’t see Dish as viable wireless option at this time, if ever.
Cowen & Co. analyst believes the deal will get blocked
Some Wall Street analysts predict Judge Victor Marrero will approve the T-Mobile-Sprint merger, but Cowen & Co. analyst Paul Gallant is not one of them, according to Inside Towers. Gallant feels there’s a 60 percent chance that 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.
Lightshed Partners, Raymond James expect Judge Marrero to approve the deal
\Walt Piecyk is telecom, media and tech analyst with Lightshed Partners. He believes T-Mobile CEO John Legere, Dish Network Chairman Charles Ergen, and former Sprint CEO Marcelo Claure presented strong enough testimonies. Strong enough to persuade Judge Marrero that the industry’s competitive balance will stay in tact.
“Many investors believe that the case hinges on Charlie Ergen’s ability to establish himself. As well as Dish as a viable and credible fourth wireless competitor,” Piecyk 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 also expects the judge to rule in T-Mobile and Sprint’s favor. Despite his prediction, he dropped the odds of approval from 85 percent to 55 percent. Prentiss also noted that nothing occurred during the trial that would have made Judge Marrero’s decision any easier either way.
T-Mobile remains confident case will go in their favor
While the T-Mobile-Sprint merger case could go either way in the analysts’ minds, T-Mobile COO Mike Sievert feels the case will go the carrier’s way. The executive said at an investor relations event this week that, “right is on our side,” and “We’re very anxious to see the judge’s verdict.”