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Md. Joins National Suit Seeking to Block $26B Cell Phone Company Merger

Maryland on Tuesday joined nine states in filing a multi-state lawsuit to halt the proposed merger of telecom giants T-Mobile and Sprint. The complaint, filed in the U.S. District Court for the Southern District of New York, alleges that the merger of two of the four national mobile network operators would deprive consumers of the benefits of competition and drive up prices for cell phone services.

T-Mobile US Inc. and Sprint Corp. are the third and fourth largest mobile wireless networks in the U.S., respectively, and are the lower-cost carriers among the “Big Four.” Verizon Wireless and AT&T – two largest wireless networks – round out the market.  Intense competition, spurred in particular by T-Mobile and Sprint, has meant declining prices, increased coverage, and better quality for all mobile phone subscribers, the Maryland Attorney General’s office said.

“The merger of two of the country’s largest cell phone carriers is dangerous for consumers,” said Attorney General Brian E. Frosh (D). “Reduced competition in a market that only has four major competitors right now will result in higher prices and fewer options for Marylanders.”

While T-Mobile and Sprint have made promises that their merger would offer lightning-fast speeds and increased capacity, an investigation led by the attorneys general found that many of the claimed benefits were unverifiable and could only be delivered years into the future, if ever.

Before filing suit, the states gave significant consideration to T-Mobile and Sprint’s claims of increased coverage in rural areas, Frosh’s office said.

In addition to Maryland, the attorneys general of California, Colorado, Connecticut, Maryland, Michigan, Mississippi, New York, Virginia, Wisconsin, and Washington, D.C., also joined the suit. New York Attorney General Leticia James (D) and California AG Xavier Becerra (D) were the lead plaintiffs.

T-Mobile currently has more than 79 million subscribers, and is a majority-owned subsidiary of Deutsche Telekom AG.  Sprint Corp. currently has more than 54 million subscribers, and is a majority-owned subsidiary of SoftBank Group Corp.

The $26 billion merger deal is still awaiting approval by the Justice Department.

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