Home » Competition »Consumer News »Public Policy & Gov't »Sprint »T-Mobile »Wireless Broadband » Currently Reading:

Justice Dept. Staffers Warn T-Mobile/Sprint Merger Unlikely to Win Approval as Structured

Phillip Dampier April 16, 2019 Competition, Consumer News, Public Policy & Gov't, Sprint, T-Mobile, Wireless Broadband No Comments

Justice Department staffers have told T-Mobile and Sprint that their $26 billion merger is unlikely to win approval as presently structured, according to a report in the Wall Street Journal.

Unnamed sources familiar with the deal told the newspaper the Justice Department’s Antitrust Division is among the most skeptical of those reviewing the deal, questioning claims from the companies that the merger will create synergy and increased efficiency that could free up resources to dramatically expand the combined company’s wireless business.

At the core of the concern is the impact of combining the nation’s third and fourth largest wireless carriers, reducing competition to just three national postpaid companies — AT&T, Verizon Wireless, and T-Mobile. That could present an unacceptable threat to competition.

The Justice Department is not alone expressing concern over the merger deal. Multiple state attorneys general are still reviewing the deal and several have announced they are prepared to sue the companies involved to stop the merger if it manages to win approval on the federal level. The Federal Communications Commission is also said to be questioning some of the claims of the company about the merits of its promised 5G home broadband service and exactly how much consumers could save should they subscribe.

The Financial Times also published a story this afternoon essentially confirming the Journal story.

John Legere, CEO of T-Mobile USA, denied the premise of the Journal’s story in a tweet late this afternoon, calling it “simply untrue,” but refused further comment.

Any decision about the merger is not expected for several weeks, and any recommendations from the staff report on the deal can be overruled by the political appointees that run the Justice Department. The Times reports that the final decision will likely rest with Makan Delrahim, President Trump’s pick as chief of the antitrust division. With staff objections now leaked to the press, Delrahim could be in a politically difficult situation overruling his staff’s recommendations. In the meantime, company officials can offer concessions, such as selling off certain assets to overcome regulator objections.

Many Wall Street analysts feel the chances of the merger winning approval are reduced the longer the merger review remains underway in Washington. Many have placed the odds at less than 50% that the deal will ultimately be approved. If it is rejected, T-Mobile is expected to continue its business without any significant financial hurdles. Sprint may be a different matter, as its Japanese backer SoftBank has soured on the merits of pouring additional money into Sprint’s wireless business.







Search This Site:

Contributions:

Recent Comments:

  • Paul Houle: Nuts. Customers don't care if Verizon beats South Korea by a few days. I don't think it makes a difference in their earnings this quarter, or the n...
  • Matt Mosher: I'm in the 80,000 Hughes net crew as well. I had Hughes back in 2004-2008 so I am more than aware of their garbage and what a joke it was that this fi...
  • Ed: On the money that was just bragging rights. Later this year when 5G home equipment is released and in Q1 2020 when they roll out dynamic spectrum sha...
  • TJ: I called on 4/22/19 to cancel services because my bill was too high. They sent me to the cancellation department and the guy just said ok the service ...
  • Michelle D Loewy: No internet service at the home all day Tuesday and still none today. No reason given just that the Western North Carolina area is down. Has anything ...
  • william carter: got my spectrum bill yesterday. It went up $16 per month. I called CS and they said my 1 yr promotion is gone on my internet and i have to pay full ...
  • New Yorker: Sold a penny puppet-show to appease us (We The People) and then sold out for millions/billions. F**k this country already....
  • Dorairaj Isaac: I would like to return the products for a refund...
  • EJ: I hope they are ready to do this all over again when Charter does basically nothing again. Hopefully they will use this extension to come up with a Pl...
  • Phillip Dampier: Public Comments: http://documents.dps.ny.gov/public/Comments/PublicComments.aspx?MatterCaseNo=15-M-0388...
  • Phillip Dampier: The reason they are lumping the two together at this point is because there are not a lot of attractive territories left to bid on. Even when the stat...
  • Paul Houle: For me the $60,000 question is this: how do I submit comments to NYS about this plan? I went looking on the PSC web site and it wasn't clear at all....

Your Account: