U.S. Justice Department Likely Opposed to Sprint/T-Mobile Merger
UPDATEReuters reported that when Sprint Corp and T-Mobile U.S. Inc bring their expected merger plans – agreed upon in late September – to the U.S. Department of Justice for antitrust review, the staff will likely recommend putting a stop to any further plans.
Inside Towers previously reported on the current merger talks, which aren’t new. Three years ago, Sprint and T-Mobile discussed a deal, but the former abandoned it, due to opposition from U.S. antitrust regulators.
Presently, the Justice Department’s main concern is how the deal between the third and fourth largest U.S. wireless carriers will affect competition in the U.S. mobile sector. Currently, the U.S. wireless market is dominated by Verizon with about 146 million wireless customers and AT&T with nearly 135 million. The deal will also test the antitrust enforcement under the Trump administration.
T-Mobile positions itself as the fastest-growing wireless company in the U.S. and if teamed with Sprint, they’ll own more than half (56 percent) of the market for pre-paid plans, favored by people with little or poor credit. “Losing that head-to-head competition could drive up prices for those on a more limited income,” said Gene Kimmelman, president of Public Knowledge, a consumer advocacy group.
According to an informal poll of seven antitrust experts contacted by Reuters, results were split between whether the deal would be stopped or allowed; only a tiny fraction of deals are blocked.
Regarding the future of the merger, the final decision will come down to antitrust enforcer at the Justice Department, Makan Delrahim, and the FCC.