T-Mobile and Sprint Merger Unlikely to Be Approved as Currently Structured [Updated]

United States Justice Department staff members told Sprint and T-Mobile that their planned merger is unlikely to be approved as it is currently structured, reports The Wall Street Journal.

The merger agreement between the two companies hinges on approval from the Justice Department's antitrust division, which has been exploring whether the deal would result in a major threat to competition.

In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companies' arguments that the combination would produce important efficiencies for the merged firm, the people said.

Sprint and T-Mobile have other hurdles to overcome as well. Multiple state attorneys are prepared to launch lawsuits if the Justice Department doesn't end up challenging the merger, according to sources that spoke to The Wall Street Journal.

The FCC has also been asking the two companies for more information on topics like cost savings and wireless infrastructure plans.

A final decision "likely several weeks away" and ultimately, the staff position on the matter is a recommendation that can be overruled by the Justice Department leaders.

Discussions are ongoing and Sprint and T-Mobile may be willing to offer concessions that include assets sales to get the government to approve the merger plans.

T-Mobile and Sprint first announced plans for a merger in April 2018. If approved, the merger will combine two of the four major carriers in the United States, giving the new company nearly 100 million customers.

Update: According to T-Mobile CEO John Legere, the "premise" of the WSJ's story is untrue, though Legere declined to provide additional details.

The premise of this story, as summarized in the first paragraph, is simply untrue. Out of respect for the process, we have no further comment. This continues to be our policy since we announced our merger last year. https://t.co/3q9CVgkRfv key info: https://t.co/N5YvuuJtPZ
— John Legere (@JohnLegere) April 16, 2019

Tags: Sprint, T-Mobile

Top Rated Comments

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macduke

9 months ago

Major threat to what competition? The two huge giants of AT&T and Verizon that already rule the land with an iron fist? I think a third player who is about the size of the two giants will be able to provide more competition than we have today. And let's face it—if somebody doesn't buy up Sprint they're just going to go bankrupt eventually and who do you think will be the highest bidders for their spectrum and infrastructure? AT&T and Verizon. I think T-Mobile has proven that they're more consumer friendly than anyone else out there. They just need to build up their network more.

Rating: 13 Votes

DonutHands

9 months ago

They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.

Its probably not ridiculous, Id rather see 3 major companies in this sector than 2 of the minor companies go bankrupt and leave 2 giants remaining.

Rating: 7 Votes

BasicGreatGuy

9 months ago

I am surprised Sprint has lasted as long as they have. They continue to leverage themselves from loans to keep going. If the deal doesn't go through, I predict Sprint will go under in the next 2 - 3 years (if not sooner).

Rating: 3 Votes

mcalict

9 months ago

I am surprised Sprint has lasted as long as they have. They continue to leverage themselves from loans to keep going. If the deal doesn't go through, I predict Sprint will get go under in the next 2 - 3 years (if not sooner).

This ^^^.

If this deal isn't approved it's clear with Sprint's debt load they wouldn't survive as a long-term viable operation. Then we'd be left with the big 2, and a feisty, but limited resourced TMobile in 3rd. Better to have a strong 3rd consumer choice, even with the risk of an eventual elimination of redundancies, regardless of what promises are made now. Easy for me to say that last part, I know.

Rating: 2 Votes

goobot

9 months ago

Its probably not ridiculous, Id rather see 3 major companies in this sector than 2 of the minor companies go bankrupt and leave 2 giants remaining.

I can’t see T-mobile going anywhere anytime soon. Maybe sprint.

Rating: 2 Votes

konqerror

9 months ago

They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.

Many countries have only 3 carriers (Germany, Austria, Switzerland, Portugal, Norway, Greece, Belgium, China*). Many others have 3 plus a weak 4th (Canada, Japan). There aren't many countries with 4 strong carriers.

You need to support your statement with some real economic analysis.

Rating: 2 Votes

BasicGreatGuy

9 months ago

There goes my hopes of having better service from Sprint

If you are waiting for better service, you would probably get better from a different carrier.

Rating: 2 Votes

iDuel

9 months ago

Net neutrality is what I quoted from Wikipedia and doesn't have to do with the ISP's agreements with websites. Long-term it's not good to let the ISP do anything except serve data. The practical issue with giving services out for free/cheap is it's the same as charging more for everything else. If you get internet service in a country where it's not neutral, like Mexico, the usual deal is "data costs a ton of money, but data is free or cheap if you use WhatsApp, Uber, Netflix, etc." This isn't that, but it's a start, and it's gone down that way in many other countries.

There's also the situation where nobody is behaving overtly maliciously, but only big companies can practically form these deals with ISPs. The deals seem to benefit everyone, but as a result, other companies are forever disadvantaged. It's like how Apple gets a tax break on building their campuses, worthwhile to the city because it's that or 0, while small businesses can't do that. I still don't think that any company can participate in Binge On, or else more would, and I haven't seen proof that video providers don't give T-Mobile anything to join.

With BingeOn, video providers only have to make sure that their video streams are being recognized as video streams from that provider on T-Mobile's network. There's really no involved technical process to become a zero-rated service. I could see your point if the companies were required to sign joint sponsor or payment agreements with T-Mobile, but this isn't the case here.

Rating: 2 Votes

cocky jeremy

9 months ago

I hope it gets flatly denied, honestly.

Not that I really like government interference, but this merger just causes more of the same problem. Why wouldn't T-Mobile and Sprint want to continue operating as separately profitable entities? Because their only competition is 2 gigantic, overly large companies.

They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.

Sprint is dead regardless, so we might as well use them to help T-Mobile become actual competition to the big 2.

Rating: 2 Votes

JetTester

9 months ago

In our area, Sprint service is pretty poor. If they are that bad everywhere, I don't see why T-Mobile would want to merge with them. Either way, not interested in their service.

Rating: 1 Votes

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