T-Mobile U.S. and Sprint did not pursue a merger to lower price competition in the U.S. wireless market, the chief executive of Deutsche Telekom, T-Mobile’s majority stakeholder, testified Tuesday in a federal courtroom in Manhattan.
A crew of state attorneys general, headed by New York and California, are suing to cease the $26.5 billion merger between the wireless service providers, arguing it would result in higher prices.
Timotheus Höttges, who is the chairperson of T-Mobile’s panel, testified that T-Mobile endeavored to merge with its smaller competitor to increase scale and gain wireless spectrum, or airwaves that carry data, however, refused the aim was to reduce competition. His deposition came on the second day of a trial that’s anticipated to run until December 20.
Attorneys for the states presented proof Tuesday from a T-Mobile panel presentation back in 2010, when the firm first explored a contract with Sprint, that said the merger would have “potential to lower price competition.”
Höttges downplayed the presentation, saying it was prepared by advisers and was not a former Deutsche Telekom document.
T-Mobile and Sprint have already obtained a permit for the merger from the U.S. Division of Justice and the Federal Communications Commission after the businesses agreed to sell Sprint’s prepaid phone unit and some spectrum to satellite TV provider Dish Network
The firms argue that a stronger T-Mobile would result from the proposed takeover, making it better able to innovating and compete to reduce wireless prices. The case signifies a break with the usual process of states agreeing with the federal government in reviewing mergers and usually coming to a joint conclusion.