Democratic senators urge administration to reject Sprint T-Mobile merger

The Sprint logo is displayed on a a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., April 30, 2018. REUTERS/Brendan McDermid

WASHINGTON (Reuters) – A group of seven Democratic U.S. senators and independent Senator Bernie Sanders on Tuesday urged the Justice Department and Federal Communications Commission to reject the proposed $26 billion merger between T-Mobile US Inc and Sprint Corp.

The letter signers include potential or confirmed presidential candidates Sanders, Amy Klobuchar, Sherrod Brown, Kirsten Gillibrand, Elizabeth Warren and Cory Booker. The merger is “likely to raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation,” they wrote.

The companies did not immediately comment. A U.S. House panel is set to hold a hearing on the merger on Wednesday.

The senators noted that the four largest wireless carriers including AT&T Inc and Verizon Communications Inc control 98 percent of the market. “Antitrust regulators around the world have consistently blocked four-to-three mergers in the mobile and telecommunications industry, and those who have allowed such mergers have lived to regret it,” they wrote.

Separately, T-Mobile Chief Executive Officer John Legere defended the merger in written testimony released Tuesday before a House Energy and Commerce Committee panel hearing. He said the company does not “use Huawei or ZTE network equipment in any area of our network” and will “never” use equipment from the Chinese firms in the next-generation high-speed 5G network.

Legere said the transaction will lead to lower prices and more U.S. jobs, even as opponents argue it will lead to the combined carrier hiking prices and cutting costs.

Legere’s testimony says the combined firm’s business plan projects “aggressive share increases – taken from the industry leaders AT&T and Verizon – through its accelerated, enhanced 5G deployment.” He said the company plans to “keep the customers we’ve fought hard to win and win new customers with great quality, lower prices, and more innovative offerings.”

Sprint Executive Chairman Marcelo Claure will tell the panel that the combined firm’s improved network “will be able to compete for customers who have been reluctant to use Sprint or T-Mobile because of concerns that the quality of their individual networks is not as good as those offered by Verizon or AT&T.”

Reporting by David Shepardson; Editing by Dan Grebler and David Gregorio

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