MANHATTAN (CN) – As the high-profile antitrust trial on the T-Mobile-Sprint merger reaches a midway point, T-Mobile CEO John Legere testified Friday that the company could have to hike customer prices if T-Mobile’s $26.5 billion deal to buy Sprint falls through.
Appearing in a dark suit with a T-Mobile-accented magenta tie, the social media-savvy CEO said that raising prices to slow user growth and relieve stress on the T-Mobile network would be his "worst nightmare."
T-Mobile’s proposed $26.5 billion merger with Sprint faces a bench trial in Manhattan where a coalition of states say shrinking the big-four wireless carriers down to three would result in higher prices for wireless customers, particularly for users of prepaid plans. In addition to New York and California, 11 other states and the District of Columbia have joined the challenge.
At trial before U.S. District Judge Victor Marrero, T-Mobile insists that the "supercharged" merged company would increase pressure on AT&T and Verizon to lower prices.
Legere's testimony regarding T-Mobile's potential pricing strategy Thursday stemmed from a September 2019 T-Mobile document that made projections about T- Mobile's future as a standalone company in 2020.
A lawyer for the states, Glenn Pomerantz, laid out evidence that T-Mobile had options beyond acquiring Sprint that would let it obtain more spectrum, the airwaves that signals travel over, considered the lifeblood of a wireless network.
Adding spectrum capacity would shore up the network from the strain of its growing user base binging Netflix videos and uploading content to social media.
Pomerantz presented an email Legere sent in June 2015 saying that a potential acquisition of Dish "super-charges" T-Mobile, the same language T-Mobile has used to describe its Sprint deal.
Dish, like Sprint, has vast amounts of wireless spectrum, having spent $21 billion buying it.
Legere said he liked the possibilities of that deal but that T-Mobile wasn't able to complete it.
On cross-examination by Pomerantz, the boastful CEO crowed that there are “tens of millions of subscribers of Sprint who can’t wait to be part of T-Mobile.”
U.S. District Judge Marrero pressed the witness Friday to explain why a post-merger T-Mobile wouldn't just turn into the dominant market leaders he antagonizes, likening the self-styled un-carrier to "so-called flower children … the mavericks of the day" sprung from 1960s counterculture who later grew up to become "investment bankers on Wall Street."
Would T-Mobile would hold back punches and not compete as actively if the transaction goes through, and the un-carrier “essentially become[s] one of the boys,” Marrero asked.
With a hint of underdog pride Friday afternoon, Legere called himself possibly the single-most hated man in the industry by AT&T and Verizon.