Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 1 of 66
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`
`
`Joseph M. Alioto (SBN 42680)
`Jamie L. Miller (SBN 271452)
`Thomas P. Pier (SBN 235740)
`ALIOTO LAW FIRM
`One Sansome Street, 35th Floor
`San Francisco, CA 94104
`Telephone: (415) 434-8900
`Email: jmalioto@aliotolaw.com
`
`
` jmiller@aliotolaw.com
`
`[ADDITIONAL COUNSEL LISTED ON LAST PAGE]
`
`
`UNITED STATES DISTRICT COURT
`
`SOUTHERN DISTRICT OF NEW YORK
`
`
`
`KEITH DEAN BRADT, TIM NIEBOER,
`PAM WARD, VALERIE JOLLY, JUNE
`STANSBURY, KATHERINE ARCELL,
`CHRISTINE WHALEN, JOSE BRITO,
`BRENDA DAVIS, PAM FAUST, CAROLYN
`FJORD, GABE GARAVANIAN, HARRY
`GARAVANIAN, JOCELYN GARDNER,
`MIKE MALANEY, LEN MARAZZO, LISA
`MCCARTHY, DEBORAH PULFER,
`WILLIAM RUBINSOHN, SONDRA
`RUSSELL, CLYDE STENSRUD, GARY
`TALEWSKY, DIANE ULTICAN and
`JEFFREY NICKERSON,
`
`
`
`
`T-MOBILE US, INC., DEUTSCHE
`TELEKOM AG, SPRINT CORPORATION,
`and SOFTBANK GROUP CORP,
`
`
`
`______________________________________
`
`
`
`
`Defendants.
`
`
`v.
`
`Plaintiffs,
`
`CASE NO.:
`
`
`COMPLAINT TO PROHIBIT
`THE MERGER OF SPRINT
`BY T-MOBILE IN
`VIOLATION OF SECTION 7
`OF THE CLAYTON
`ANTITRUST ACT, 15 U.S.C. §
`18, AND SECTION 1 OF THE
`SHERMAN ANTITRUST
`ACT, 15 U.S.C. § 1
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`INTRODUCTION
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`1.
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`The telecommunications industry in the United States is a huge and
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`vitally important component of the economic engine that serves to propel and innovate
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`our economy and to define our identity as a nation. There are more cellular phones in
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`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 2 of 66
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`the United States than there are people.
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`2.
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`There are now four companies in the United States that control 98.7% of
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`the cellular telecommunications market. These four companies are Verizon, AT&T, T-
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`Mobile and Sprint. The number three company, T-Mobile, now proposes to merge
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`with the number four company, Sprint.
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`3.
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`As a result of this merger the new T-Mobile would command 29.7% of
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`the national market share for voice calls and text in the United States. The further
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`result would be to concentrate the nation’s critical communications facilities in only
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`three companies that will command nearly 99% of the market - one of which
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`companies is foreign-owned and controlled. This is an open and blatant violation of
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`the antitrust laws as has been defined and underscored in the benchmark opinions our
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`Supreme Court.
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`4.
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`The economic policy of the United States Congress, endorsed by the
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`United States Supreme Court, is to promote competition over combination.1
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`Competition spurs investment and jobs, stimulates output and creates greater consumer
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`choice.
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`5.
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`The merger of T-MOBILE and SPRINT now threatens to subvert this
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`policy by accelerating an anticompetitive trend toward hegemony in the
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`telecommunications industry that will have drastic strategic consequences for the
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`country.
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`6.
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`Plaintiffs have filed this suit to take a stand in favor of competition over
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`concentration in this marketplace and to “call a halt” to the trend toward domination by
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`megaliths.2
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`1 “A company's history of expansion through mergers presents a different economic picture than a history of
`expansion through unilateral growth. Internal expansion is more likely to be the result of increased demand for
`the company's products and is more likely to provide increased investment in plants, more jobs and greater
`output. Conversely, expansion through merger is more likely to reduce available consumer choice while
`providing no increase in industry capacity, jobs or output. It was for these reasons, among others, Congress
`expressed its disapproval of successive mergers. Section 7 was enacted to prevent even small mergers that added
`to concentration in an industry. See S. Rep. No. 1775, 81st Cong., 2d Sess. 5.” Footnote 72, Brown Shoe v.
`United States, 370 U.S. 294, at 345 (1962).
`2 “We cannot avoid the mandate of Congress that tendencies toward concentration in industry are to be curbed in
`their incipiency, particularly when those tendencies are being accelerated through giant steps striding across a
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`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 3 of 66
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`7.
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`This is a private antitrust action seeking an Order of the Court prohibiting
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`the proposed merger and resulting elimination of SPRINT COPRORATION
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`(hereinafter SPRINT) by T-MOBILE US (hereinafter T-MOBILE) as a violation of the
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`antitrust laws.
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` 8.
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`This merger will create a "threatened loss or damage" to the Plaintiffs
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`and to the public at-large should SPRINT be eliminated the effect of which may be to
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`increase prices because SPRINT is currently the low-cost competitor among the four
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`national competitors in the marketplace. Furthermore, SPRINT’s cellular service
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`covers over 93% of the United States population. Its merger will eliminate 17% of the
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`nationwide wireless services market currently serviced by SPRINT and will reduce the
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`number of competitors in the market from four to three, with the result that the three
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`remaining companies will control 98.7% of the market, far greater than any
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`concentration previously permitted under the Supreme Court decisions.
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`
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`9.
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`T-MOBILE’s merger of SPRINT for $26 billion in cash is both
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`substantial and non-trivial and the combined companies will be valued at $146 billion.
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`The company’s ownership will be split three ways, with Deutsche Telekom owning
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`41.7 percent and SoftBank Group holding 27.4 percent. The remaining 30.9 percent
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`will be publicly owned.
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`hundred cities at a time. In the light of the trends in this industry we agree with the Government and the court
`below that this is an appropriate place at which to call a halt. Id. at 346.
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`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 4 of 66
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`10.
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`The combined company will have more than 130 million customers,
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`closing in on rivals AT&T which is first with 154 million subscribers and Verizon
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`which is second with 150 million. T-Mobile is currently the third largest carrier in the
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`U.S. with 77.3 million subscribers, while Sprint is currently fourth with approximately
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`53.5 million customers.
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`11.
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`The proposed merger is a violation of Section 7 of the Clayton Antitrust
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`Act (15 U.S.C. § 18) in that the effect of the elimination of Sprint may be
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`“substantially to lessen competition, or tend to create a monopoly” in the retail mobile
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`wireless services market in the United States.3
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` 12. The proposed merger is prohibited by the binding authority of the
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`Supreme Court of the United States in its decisions in Brown Shoe Co. v. United States,
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`370 U.S. 294 (1962), United States v. Philadelphia National Bank, 374 U.S. 321
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`(1963), United States v. Aluminum Company of America, 377 U.S. 271 (1964), United
`
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`3 Section 7 of the Clayton Antitrust Act provides in pertinent part as follows: “No person engaged in commerce
`or in any activity affecting commerce shall acquire, directly or indirectly, the whole or any part of the stock or
`other share capital … where in any line of commerce or in any activity affecting commerce in any section of the
`country, the effect of such merger may be substantially to lessen competition, or tend to create a monopoly.”
`
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` - 4 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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` States v. Von’s Grocery Co, 384 U.S. 270 (1966), United States v. Pabst Brewing Co.,
`384 U.S. 546 (1966), and United States v. Falstaff Brewing Corporation, 410 U.S. 526
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`(1973).
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`JURISDICTION
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`13.
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`This private action is specifically authorized under Section 16 of the
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`Clayton Antitrust Act (15 U.S.C. § 26) which provides in pertinent part that “any
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`person…shall be entitled to sue and have injunctive relief …against threatened loss or
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`damage by a violation of the antitrust laws.”
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`14.
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`The private action to vigorously challenge a merger is encouraged by the
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`Congress and the Supreme Court of the United States. In strong and unmistakable
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`language, the Supreme Court has declared in its American Stores opinion: “The Act’s
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`other provisions manifest a clear intent to encourage vigorous private litigation against
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`anticompetitive mergers." California v. American Stores Company, 495 U.S. 271, 284
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`(1990).
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`15.
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`Plaintiffs therefore bring this action under the authority of Section 16 of
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`the Clayton Antitrust Act (15 U.S.C. § 26) and allege that the proposed elimination of
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`SPRINT by T-MOBILE constitutes a substantial threat of injury to the Plaintiffs
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`because the merger may have the effect “substantially to lessen competition and tend to
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`create a monopoly” in the United States in violation of Section 7 of the Clayton
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`Antitrust Act (15 U.S.C. § 18). In addition, the contract to eliminate SPRINT
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`constitutes a “contract, combination in the form of a trust or otherwise, or conspiracy”
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`as an unreasonable restraint of trade in violation of Section 1 of the Sherman Antitrust
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`Act4 in that, among other things, it is a non-trivial transaction between significant
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`rivals, neither of which is a failing company, that eliminates a substantial and growing
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`competitor from the market.
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`16.
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`The proposed merger is in and substantially affects the interstate and
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`foreign commerce of the United States in that wireless voice-calls, messaging and data
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`and all the accoutrements and other necessities of the wireless telecommunications
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`4 15 U.S.C. §1.
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` - 5 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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`industry are in the constant flow of the interstate and foreign commerce of the United
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`States. In addition, because Defendants transact business in this judicial district, venue
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`is proper pursuant to 15 U.S.C. §§15, 22 and 26, and 28 U.S.C. § 1391.
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`17.
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`Plaintiffs seek an Order from the Court prohibiting the proposed merger
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`by T-MOBILE to eliminate SPRINT as a significant competitor.
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`THE INDUSTRY
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`18.
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`The wireless telecommunications industry is a critical and vital modern
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`necessity to the commercial, social and political well-being of the United States.
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`Competition rather than combination is the rule of trade in the United States so that
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`these Plaintiffs, and the public at large, may enjoy the benefits of competition,
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`including, inter alia, the best possible services at the lowest possible prices. Vigorous
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`enforcement of the antitrust laws by private persons is an essential part of the
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`Congressional plan to ensure that competition rather than monopoly is, and remains,
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`the rule of trade in the United States, especially including the telecommunications
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`industry which has become and is now a vital element that supports not only this
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`nation’s economic vitality but also that underlies and supports this nation’s democratic
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`ideals and aspirations.
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` 19. The telecommunications industry in this country has experienced a
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`furious feeding frenzy of mega-mergers which has resulted in the reduction of the
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`major telecommunications companies from seven competitors to four, effectively, over
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`the last 14 years, almost halving the principal competitive telecommunications choices
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`to the general public since 2004.
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`20.
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`The continued independent existence of SPRINT constitutes the single
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`most important bulwark to block this almost unstoppable trend toward complete
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`concentration and domination in the telecommunications industry.
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`21.
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`In 2002, there were seven national wireless carriers in the U.S.: AT&T,
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`Verizon, Sprint, T- Mobile, Nextel, AllTel and Cingular. In a consolidation spree that
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`began in 2004, Cingular acquired AT&T. This was followed by Sprint’s merger of
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`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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` Nextel in 2005—a merger that has been called one of the “worst mergers ever.”5
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`22. A T-MOBILE merger of SPRINT would leave three roughly equal-sized
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`firms in the national wireless market, with the merged Sprint-T-Mobile (“New T-
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`Mobile”) commanding approximately 29.7% of the national market share for voice
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`calls and text, AT&T with 33.9% and Verizon with 35.1%. These three firms would
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`control almost 99% of the national U.S. wireless market.6
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`Estimated Total Connections for Publicly Traded Facilities–Based Mobile Wireless Service
`Providers (in thousands): 2014–2017
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`Service Providers EOY 2014 EOY 2015 EOY 2016 EOY 2017 EOY 2017 (% Market
`
`Share)
`Verizon Wireless
`AT&T
`T-Mobile
`Sprint
`U.S. Cellular
`Top 5 Service Providers Total
`
`
`134,612
`120,620
`55,018
`55,929
`4,760
`370,939
`
`140,924
`128,679
`63,282
`58,578
`4,876
`396,339
`
`145,859
`134,875
`71,455
`59,515
`5,079
`416,783
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`151,978
`146,847
`74,040
`54,683
`5,063
`432,611
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`35.1
`33.9
`17.1
`12.6
`1.2
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`23.
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`Such oligopolistic market structures are highly conducive to
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`anticompetitive coordination and collusion, and do not promote hard-nosed
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`competition. Sprint and T-Mobile have demonstrated strong incentives to be aggressive
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`competitors. By reducing prices and improving service quality, for example, the two
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`firms can attract new subscribers and capture market share from AT&T and Verizon.
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`In contrast, a merged Sprint-T-Mobile would have a much larger market share. With a
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`bigger piece of the national wireless pie, the merged entity would likely find that
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`maintaining a competitive “peace” with Verizon and AT&T is a more profitable tack
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`5 In 2009, Verizon bought All-Tel. This was followed by AT&T’s unsuccessful attempt to buy T-Mobile in 2011
`and T-Mobile’s successful merger of mobile virtual network operator (MVNO) Metro PCS. The DOJ and the
`FCC forced the abandonment of the AT&T-T- Mobile deal. Like Sprint-T-Mobile, it was also a 4-3 merger that
`would have eliminated T- Mobile, a smaller, efficient, and innovative player that set the industry bar high for the
`remaining rivals. AT&T’s rationale that the merger with T-Mobile was essential for expanding to the then-
`impending 4G LTE network technology also did not pass muster. In August of 2014, two years after the
`abandoned attempt, Forbes magazine concluded that there would have been “no wireless wars without the
`blocked AT&T-T-Mobile merger.”
`6 Certain smaller mobile virtual network operators would remain. These operators include Trachoma, Republic
`Wireless, Jolt Mobile, Boost Mobile and Cricket Wireless which purchase access to cell towers and buy spectrum
`at wholesale from the larger players, reselling to their wireless subscribers.
` - 7 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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`than aggressively trying to gain market share from them.
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`24.
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`In the recent aborted AT&T-T-Mobile merger, both the DOJ and FCC
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`found that the wireless market was conducive to coordinated manipulation. The
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`government’s complaint noted that “Certain aspects of mobile wireless
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`telecommunications services markets, including transparent pricing, little buyer-side
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`market power, and high barriers to entry and expansion, make them particularly
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`conducive to coordination.” The complaint concluded that the “substantial increase in
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`concentration that would result from this merger, and the reduction in the number of
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`nationwide providers from four to three, likely will lead to lessened competition due to
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`an enhanced risk of anticompetitive coordination.” The FCC also explained similarly
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`that “[c]oordinated effects are of particular concern here because the retail mobile
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`wireless services market, being relatively concentrated and hard to enter, appears
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`conducive to coordination.”
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`25.
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`Indeed, the DOJ recently opened an investigation into collusion by the
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`two largest carriers, Verizon and AT&T and their industry standards organization, to
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`inhibit consumer switching between wireless carriers. Now, inexplicably, the DOJ
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`seeks to sanction this merger of the number 3 and 4 players in the telecommunications
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`market. The rationale for the DOJ’s position is currently unknown.7
`
`
`7
`On July 26, 2019, the United States Department of Justice (“DOJ”) filed a complaint in the District of
`Columbia, United States, et al., v. Deutsche Telekom AG, et al., Case No. 1:19-cv-02234-TJK, to prevent the
`merger. Simultaneously the DOJ filed a negotiated final judgment and stipulation, reflecting the terms of a pre-
`arranged settlement with Defendants. The Proposed Settlement permits T-Mobile/Sprint proceed with the merger
`subject to divestiture of certain assets to DISH Network Corporation (“DISH”), a U.S. television provider that is
`not even currently a competitor in the mobile telecommunications market.
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`In reaching its contorted settlement, and in an attempt to put lipstick on this pig, the DOJ cobbled
`together various assets and bestowed them on DISH, an inexperienced Pay-Tv provider, all the while keeping its
`fingers crossed that, in five to ten years, DISH may eventually become a competitive constraint on the three
`newly minted behemoths in the national wireless telecommunications market.
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`Verizon has nearly 120 million cellphone customers. AT&T and the newly merged T-Mobile will each
`have over 90 million customers. Dish’s upstart new network will be dwarfed by the incumbents.
`
` In point of fact, prior to the DOJ’s arranged marriage, Charlie Ergen, DISH’s founder and chief
`executive officer, had been the most outspoken critic of the T-Mobile merger. Having attempted to break-in to
`the cellular market on three prior occasions and having been rebuffed, Ergen could hardly contain his ironic good
`fortune when in May he answered a telephone call from John Legere, chief executive of T-Mobile, whose
`opening line to Ergen was: “Justice has said that we need a fourth carrier. We should talk if you are interested.”
`This call had been motivated after staff lawyers at the DOJ had advised T-Mobile that the merger was in trouble
`because it would necessarily eliminate a fourth competitor.
`
`Justice urged the companies to cast off pieces of their business to create a fourth carrier that would fill
`the void left by absorbing Sprint. Justice had previously cast around to a number of other potential suitors such
` - 8 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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`26.
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`If collusion is possible in a 4-firm market, then it only gets easier in the
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`3-firm market that will result from a Sprint-T-Mobile combination. Coordinated
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`conduct in the Big 3 oligopolies of remaining carriers could arise in any number of
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`ways. The Big 3 would have stronger incentives to fix and increase prices or “follow”
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`each other on pricing for wireless service plans and/or equipment. The Big 3 could
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`collectively discontinue certain types of plans or forbear from introducing new,
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`cheaper and better plans. The Big 3 would also have stronger incentives to divide up
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`geographic markets within the U.S. or agree on “rules” that govern competition in the
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`industry.
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`27.
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`The Sprint-T-Mobile merger would create a post-merger national mobile
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`wireless market that would dramatically reduce incentives for the remaining Big 3
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`carriers to compete and strengthen incentives for them to engage in anticompetitive
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`coordination. Such mergers have long been recognized as particularly damaging to
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`competition and consumers.
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`28.
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`If this proposed elimination of T-Mobile is consummated, the rates for
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`telephone services may likely increase substantially.8
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`
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`as cable operators Altice USA Inc. and Charter Communications Inc. and Comcast Corp in an attempt to prop up
`the merger by adding a fourth cellular “player” that could give the merger “cover” from antitrust scrutiny. Justice
`eventually settled on DISH – a company with no cellular track record and no wireless customers – to create the
`fourth “viable competitor” needed to approve the deal.
`8 Because of T-Mobile’s aggressive competition and innovation in the wake of its failed merger, all
`major wireless carriers began offering installment pricing on new phones and more data for lower prices. See
`https://www.forbes.com/sites/markrogowsky/2014/08/27/t-mobile-and-sprint-continue-to-battle-thanks-to-the-
`government/#293eeab93160 .
`Because of T-Mobile’s aggressive competition and innovation, it has had the greatest share of “retail net
`adds,”—greater than any other national wireless service provider. Since December 31, 2014, T-Mobile has
`gained 17.5 million subscribers out of an industry total of 29.6 million new retail subscribers.
`Mergers often stifle existing organic growth trends, as the merged entity is weakened by the burdens of
`post-merger integration. The wireless industry is no exception. Sprint’s merger of Nextel is a well- known
`industry M&A failure. By 2013, Sprint did away with Nextel’s network in its entirety. Notwithstanding Sprint’s
`disastrous M&A history, it now seeks permission to merge with T-Mobile. The merger is likely to slow or stall
`the substantial internal growth undertaken by T-Mobile as a standalone competitor.
`Further, a 2016-study that evaluated a decade of manufacturing mergers found no evidence of post-
`merger increases in productivity. Blonigen, Bruce A., and Justin R. Pierce (2016). “Evidence for the Effects of
`Mergers on Market Power and Efficiency,” Finance and Economics Discussion Series 2016-082. Washington:
`Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2016.082, at p. 3.
`The proposed merger is likely to lead to price increases for consumers. The Defendants’ promise to the
`FCC that post-merger, the New T-Mobile will not increase prices for three years is tantamount to an admission
`that prices will increase. Indeed, reports done by economists for Sprint and T-Mobile establish that the merger is
`likely to cost Sprint and T-Mobile customers at least $4.5 billion annually. The harm to all mobile wireless
`subscribers is likely to be even greater. AG Complaint, Filed September 18, 2019, at ¶ 6.
` - 9 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 10 of 66
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`29.
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`The merger would eliminate the competition between SPRINT and T-
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`MOBILE the wireless industry’s two disruptive wireless carriers.
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`30.
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`Preserving the positive competitive dynamics that a disruptive rival
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`creates was the major reason why the DOJ opposed the merger of AT&T and T-Mobile
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`in 2011. Mergers that eliminate such mavericks are particularly likely to result in
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`anticompetitive post-merger coordination. As the DOJ’s complaint noted “T-Mobile in
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`particular—a company with a self-described ‘challenger brand,’ that historically has
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`been a value provider, and that even within the past few months had been developing
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`and deploying ‘disruptive pricing’ plans— places important competitive pressure on its
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`three larger rivals. . .. AT&T's elimination of T- Mobile as an independent, low-priced
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`rival would remove a significant competitive force from the market.”
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`31.
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`The loss of “disruptive rivalry” that a merger of Sprint and T-Mobile
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`would entail is equally important here, but for a different reason than in the AT&T-T-
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`Mobile case. As the third and fourth largest carriers in the Big 4, both Sprint and T-
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`Mobile have differentiated themselves from Verizon and AT&T through aggressive
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`price and non-price competition. They compete head-to-head for consumers that may
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`not be able to afford more expensive Verizon and AT&T plans or who do not need the
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`more extensive variety of plans offered by the two largest carriers. Pricing data on
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`monthly wireless plans offered by the Big 4 illustrate this important dynamic and its
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`implications for the potential loss of head-to-head competition between Sprint and T-
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`Mobile.
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`
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`A consumer group, Free Press, noted that, a “supposed three-year price freeze is meaningless in a
`wireless market where prices are falling and likely would continue to drop in the absence of this merger…The
`little bit of price competition people have enjoyed thanks to the rivalry between Sprint and T-Mobile could keep
`sending prices lower. So a meaningless and unenforceable promise to just tread water where we are now is a sad
`joke, and nothing more.” https://www.theverge.com/2019/5/21/18634195/t-mobile-sprint-merger-conditions-
`access-coverage
`Further, a retrospective study of mergers by Dr. John Kwoka concluded that mergers in highly
`concentrated industries result in price increases. John Kwoka, The Structural Presumption and the Safe Harbor
`in Merger Review: False Positives or Unwarranted Concerns? 81 Antitrust L.J. 837, 860-61 (2017).
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`The study found that in transactions with post-merger HHIs of 3,000 price increases developed in 88%
`of cases. In transactions with post-merger HHI of 3,500, that percentage increased to 92.9%. In addition, in
`transactions in which there were five or fewer remaining competitors, prices increased 100% of the time.
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`
`
` - 10 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`

`

`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 11 of 66
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`32.
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`For example, in Figures A-10 and A-11 below, taken from the FCC
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`Communications Marketplace Report published by the FCC and dated November 21,
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`2018, the 2018 data for plan rates indicate that Sprint offers the cheapest, limited 2 GB
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`data plan for one line. For unlimited data, Sprint and T- Mobile are consistently the
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`lowest cost carriers for a plan with two or more lines.
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`33.
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`Eliminating competition between Sprint and T-Mobile would likely dull
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`the merged company’s incentives to compete vigorously, creating upward pressure on
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`retail plan prices.
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` - 11 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 12 of 66
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`34. With an ever-increasing and loyal customer base, SPRINT is eyed as a
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`very substantial and dangerous competitive threat to the status quo, and especially to its
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`significant rival, T-MOBILE.
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`35.
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`The merger and consequent elimination of SPRINT as a competitor by T-
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`MOBILE may, and most probably will, result in higher wireless rates, less service,
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`fewer amenities and accommodations, the firing hundreds of SPRINT employees, the
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`eradication of consumer choice, along with other anticompetitive effects that may, and
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`most probably will, flow from the elimination of SPRINT from the market – a manifest
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`irreparable harm that once lost may never be revived.
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`36.
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`Charts provided by the FCC Communications Marketplace Report show
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`that SPRINT has reduced its prices per megabyte from 2014 through 2017 and that in
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`2016 and 2017 SPRINT was the lowest priced carrier of the four top cellular providers.
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`Fig. A-14
`ARPU Estimates of Publicly Traded Facilities-Based Mobile Wireless Service Providers 4th
`Quarter 2014–4th Quarter 2017
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`Nationwide Providers
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`AT&T
`Sprint
`T-Mobile
`Verizon Wireless
` U.S. Cellular
` Industry ARPU
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`4Q14
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`$42.04
`$40.44
`$35.56
`$45.52
` $53.58
` $42.27
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`4Q15
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`4Q16
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`4Q17
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`$38.78
`$35.54
`$34.53
`$40.99
` $49.32
` $38.54
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`$36.58
`$32.03
`$33.80
`$37.52
` $49.03
` $35.93
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`$34.13
`$32.49
`$35.62
`$35.27
` $46.89
` $34.73
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`37.
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`During the same period from 2016 through 2017 Sprint was able to
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`increase its investment in capital expenditures.
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` - 12 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
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`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 13 of 66
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`38.
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`As a result, it is apparent that SPRINT has the wherewithal, the
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`experience, the knowledge, and the ability to expand on its own, which would serve to
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`increase competition, lower prices, necessitate the creation of new jobs, increase
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`consumer choice, invite investment, and otherwise allow the consumer to enjoy the
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`benefits that competition always provides.
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`39.
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`The proposed elimination of SPRINT by T-MOBILE poses a substantial
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`threat to the Plaintiffs, and to the public at large, in that the proposed elimination will
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`only serve, as the Supreme Court warned, to “reduce available consumer choice while
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`providing no increase in industry capacity, jobs or output”, and may lessen competition
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`in each of the product and geographical markets in which T-Mobile and Sprint
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`compete, and will potentially cause loss to the Plaintiffs, and the public at large, in the
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`form of higher rates, less customer service, less expansion of wireless network,
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`curtailment of capacity, far fewer services and amenities, the elimination of consumer
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`choice and other potential anticompetitive effects which deprive the Plaintiffs, and the
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`public at large, of the salutary benefits of competition. And, as is customary in these
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` - 13 -
`Complaint to Prohibit the Merger of SPRINT by T-MOBILE in Violation of Section 7 of the Clayton Act and
`Section 1 of the Sherman Act
`
`

`

`Case 5:19-cv-07752-BLF Document 1 Filed 11/25/19 Page 14 of 66
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` anticompetitive mergers, the first casualties of the removal of competition will be the
`firing of employees who were only needed when competition existed.
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`40.
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`The elimination SPRINT is manifestly an