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BREAKING: Department of Justice Leaning Against T-Mobile/Sprint Merger

Phillip Dampier May 20, 2019 Competition, Consumer News, Public Policy & Gov't, Sprint, T-Mobile 3 Comments

Bloomberg News is reporting this afternoon that the Justice Department is leaning against the merger of T-Mobile and Sprint, because the proposed concessions offered by the two companies this morning do not resolve antitrust concerns, according to a person familiar with the review.

News of the reported opposition leaked out on the same day FCC Chairman Ajit Pai offered his support of the T-Mobile/Sprint merger, sparking media speculation Pai would not have issued his unqualified support unless the Justice Department was likely to follow suit.

If Bloomberg’s source is correct, the opposition on antitrust and competition grounds would be a major setback for the merger. Bloomberg reports that the fate of the deal now likely rests with Makan Delrahim, the head of the antitrust division of the Justice Department. Delrahim must weigh whether the merger would hurt competition and raise prices. If it would, he would likely seek to block the $26.5 billion deal.

The news has stemmed the telecom rally on Wall Street. Sprint was still trading up 14% at $7.08 at 2:44 p.m. in New York, but gave up half of its earlier gains. T-Mobile also has slowed and was up 2.9% to $77.52.

Currently there are 3 comments on this Article:

  1. Ira Madsen says:

    What’s the big deal? So what if there are only 3 carriers? There is only 1 operating system for your laptop, or 2 if Mac counts. So what?

    • Canada has three national carriers and they pay considerably more for cell service than we do as a result. Three large carriers tend to form a comfortable cartel, where they all set prices at around the same level for the same plans and rest comfortably with their market share. There is little, if any incentive for market disruptors in this kind of market, especially because the costs to build competing networks are so high. That is why you only have one cable company likely serving you.

      The more carriers to choose from, the lower the prices and the better the service, because these companies must grab more market share to maintain profitability. Once a country loses competitors to consolidation, they rarely ever gain new ones.

  2. Shmerl says:

    You never used Linux?







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