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Sprint Talks About Struggle to Improve its Network Quality in First day of Merger Trial

Executives from Sprint testified Monday that the U.S. wireless carrier has struggled to improve its network, staling its progress and stressing the need to merge with larger competitor T-Mobile US.

U.S. state attorneys general, led by New York City and California, are suing to cease the contract.

The states seek to prove in Manhattan federal court that the merger between the No. 3 and No. 4 wireless service providers would raise prices, notably for users on prepaid packages. The state attorneys general, all Democrats, asked Judge Victor Marrero to require the firms to desert the merger plan.

Sprint CMO Roger Sole testified that the firm’s strategy for enticing clients from rivals included cutting prices.

But he said the promotion’s “early success faded away quickly” because of customers having negative feedback about Sprint’s network quality.

In an effort to indicate how competition pared prices, the states presented proof that when Sprint started an aggressive promotion in 2016 to offer phone packages corresponding to those of Verizon, AT&T, and T-Mobile. T-Mobile’s MetroPCS prepaid model instantly pared prices on its plans.

The evidence is central to the states’ argument that Sprint and T-Mobile, as standalone firms drive competition between carriers, offering the best deal for consumers.

Lawyers for the states showed evidence suggesting Sprint wanted a merger so that more money could be earned from each client.

In WhatsApp messages from 2017 between Sole and Marcelo Claure, who was then CEO of Sprint, Sole suggested an agreement with T-Mobile could raise Sprint’s average income per customer by $5.

The merged had been considered in 2014 during the Obama regime, however, the Justice Department and Federal Communications Commission (FCC) urged the businesses to abandon it, which they did.