The T-Mobile acquisition of Sprint has the potential to reduce the pricing pressure of the domestic wireless market. AT&T was poised to benefit from not having multiple carriers undercut its pricing, though the new T-Mobile was primed to become a formidable player in 5G. “Either way, AT&T likely benefits from either option, but the big hiccup is the sudden desire of the Justice Department to only approve an acquisition where a viable fourth carrier is created,” according to Seeking Alpha.
In essence, antitrust chief Makan Delrahim wants the market to remain viable with four carriers. The biggest stumbling block to the merger has been the opinion that markets become anticompetitive when dropping to only three participants. The Justice Department previously blocked the 2014 attempt by Sprint and T-Mobile to merge. It also stopped the 2011 bid by AT&T to buy T-Mobile “that created the lagging fourth carrier into the juggernaut it has become,” according to Seeking Alpha.
For AT&T, the real question is whether the DOJ approval requires the spinoff of wireless airwaves or just the Boost Mobile division, reports Seeking Alpha. Tech companies like Amazon and Alphabet, to cable companies Comcast and Charter are rumored to be interested participants in the creation of a viable national wireless network provider.
The impact on AT&T and Verizon Communications is highly dependent on whether one of these companies decides to throw their might behind a national wireless network, “enhanced by gifts” from the new T-Mobile, according to the account.
June 6, 2019