T-Mobile and Sprint agreed nearly two years ago to a $26 billion all-stock combination.



Photo:

lucas jackson/Reuters

New York Attorney General

Letitia James

said the state won’t appeal a federal judge’s decision to allow

T-Mobile

US Inc. and

Sprint Corp.

to merge, removing another hurdle between the cellphone carriers and their long-planned combination.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case,” Ms. James said in a statement released Sunday. “Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.”

A federal judge in Manhattan on Tuesday ruled in favor of the companies, which agreed nearly two years ago to a $26 billion all-stock combination that would create a single wireless company with a customer base rivaling

AT&T Inc.

and

Verizon Communications Inc.

New York and California led a coalition of states that sued in June to block the deal. The states argued that leaving the country with three nationwide cellular network operators would hurt consumers, especially those with low-cost rate plans.

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The U.S. Department of Justice and Federal Communications Commission later signed off on the merger subject to certain conditions. But a core group of states remained unconvinced. Officials from 13 states and the District of Columbia faced off against the companies in two-week December trial that allowed the states to question the federal government’s decisions.

California Attorney General

Xavier Becerra

said Tuesday that the state coalition was “prepared to fight as long as necessary to protect innovation and competitive costs” but stopped short of vowing to appeal the verdict. A spokeswoman for Mr. Becerra said the state is still reviewing its options.

Both companies face more obstacles before they can close the deal. California’s independent public utilities commission and another U.S. district court in Washington are still reviewing the merger.

The companies are also negotiating changes to a merger agreement originally signed in late April 2018. T-Mobile operating chief

Mike Sievert,

who is slated to take over as chief executive after longtime CEO

John Legere

steps down, said the merger could close as early as April 1.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

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