Report says that the DOJ will approve the T-Mobile-Sprint deal with one crazy condition

Report says that the DOJ will approve the T-Mobile-Sprint deal with one crazy condition
While the FCC is okay with the T-Mobile-Sprint merger, the Department of Justice (DOJ) is not. That's because both agencies have different responsibilities; the FCC is concerned with the technical aspects of the merger while the DOJ investigates the competitive nature of the transaction. And that is where there is apparently a problem. Reducing the number of major U.S. wireless providers by 25% doesn't appeal to the DOJ, which is why the agency reportedly is against the merger.

According to Bloomberg, the Justice Department disagrees with those who say that a combined T-Mobile-Sprint would be a tougher competitor for the nation's two top wireless carriers, Verizon and AT&T. That argument doesn't seem to hold much water with DOJ antitrust chief  Makan Delrahim, who will reportedly demand that both T-Mobile and Sprint help create a new carrier that would keep the number of major providers at four.

T-Mobile CEO John Legere and Sprint chairman Marcelo Claure were both seen outside the Justice Department's building in Washington D.C. yesterday after meeting last week with officials from the agency. Asking the two carriers to help setup a competitor might be a deal breaker as far as Legere and Claure are concerned. New Street Research analyst Blair Levin says that it isn't likely that T-Mobile would agree to such a condition, although the analyst says that there are cable firms, like Dish Network who are chomping at the bit to enter the industry.

When the $26.5 billion merger was first announced last April, both executives tried to sell the deal as a way to keep the U.S. ahead of the pack when it comes to the next generation of wireless connectivity, 5G. T-Mobile's low-band 600MHz spectrum meshes well with Sprint's 2.5GHz airwaves as the pair looks to become the first wireless firm in the U.S. to offer nationwide 5G service.

FEATURED VIDEO

18 Comments

1. sun0066

Posts: 274; Member since: Feb 12, 2011

Horrible sprint as a company ! Hope t mobile just get the spectrum from sprint and nothing more , Because if it get the horrible and dirty technics that sprint has to still from customers lot of them will be migrating out , me the first one .

2. OneLove123

Posts: 1161; Member since: Aug 28, 2018

I have both services. Sprint is a lot better underground or in a really thick building. I get no eception with tmobile at all.

12. MrMalignance

Posts: 300; Member since: Feb 17, 2013

Depends on what area you're in. Where I'm at, every carrier is bad. Sprint and T-Mobile happen to be the least of the worst here.

3. vgking9699

Posts: 194; Member since: Mar 01, 2019

Would never go back to T-Mobile having them basically force my family to call better business bureau on them before leaving to att

13. BuffaloSouce unregistered

Exactly for what?

4. Alcyone

Posts: 461; Member since: May 10, 2018

Left sprint in Nov. 2013. Got tired of the dead zones in the San Antonio metro area. 13 years and they never had it all covered. Just no signal period. Just dropped calls. Sprint just needs to fold on their own accord. We need 4 major carriers, 3 won't work too well. Look at Canadian wireless prices..

14. lyndon420

Posts: 6815; Member since: Jul 11, 2012

And we have only 3 major Canada wide carriers. There are provincial ones like MTS and SaskTell etc though.

5. tuminatr

Posts: 1141; Member since: Feb 23, 2009

I don't have a dog in this fight however, I do think that 3 carriers would be less competitive than 4. Sprint has become the price leader in the marketplace. Also, the merger will result in fewer jobs despite what they have claimed.

6. Sparkxster

Posts: 1238; Member since: Mar 31, 2017

"Dish Network is chomping at the bit to enter the industry" There's our number 4. And Boost Mobile will be sold to someone who could make it into number 5 if they wish. And number 6 could be Comcast, Charter or another company buying U.S Cellular which can be possible number 6. And number 7 could be if someone is bold enough to launch nationwide satellite service. T-Mobile and Sprint merger will be great for the wireless industry and spur new players into the wireless industry.

7. tuminatr

Posts: 1141; Member since: Feb 23, 2009

There is always a reason why these companies that want to get into the market haven't. I don't see why the T-Mobile & Sprint merger would be the deciding factor for any of these players to launch. Plus timeframe any new player launching a new network is going to take years to even have a working product and years to have a competitive offering. Look at Sprint, for example, they have network issues and if it were easy they would have a great network everywhere

8. tuminatr

Posts: 1141; Member since: Feb 23, 2009

The reason why T-mobile and sprint are merging is to have the revenue through larger subscriber numbers to take on Verizon and ATT. A new competitor would not have the revenue through subscribers, therefore, they would need to have extremely deep pockets to play in this space

11. MrMalignance

Posts: 300; Member since: Feb 17, 2013

It is true that there would be redundancy job cuts, but part of the negotiations have legere promising to eventually increase the total jobs, somehow. I know, in my area, we already have Spectrum (cable company) actively signing up customers to their mobile phone service. They're not thinking about becoming a carrier, they're officially doing it. So far they're using Verizon towers though. Sounds like that may be temporary until they get a more solid footing. Edit: also, there have been multiple places where fewer carriers have been shown to actually improve competition, as opposed to hurting it.

16. tuminatr

Posts: 1141; Member since: Feb 23, 2009

Spectrum is an MVNO, not a carrier. They need to own their own network to be considered a carrier. To the argument that fewer is better this what T-Mobil & Sprint are saying. I don't know if that is correct or not, it could be but just as big of a possibility that it's bad. My thought is Sprint is currently the price leader in the market and post-merger prices would go up. Sprint is the price leader because of its network quality so network quality goes up so will price.

17. MrMalignance

Posts: 300; Member since: Feb 17, 2013

My point is that spectrum shows signs of wanting to go independent. Not continue to rely on others networks. As to your hunch about prices: yes it is possible, but there have been other markets where less has been better. We just have to wait and see what happens.

18. tuminatr

Posts: 1141; Member since: Feb 23, 2009

Not that what I say has any weight on the outcome of this merger but I think the best outcome for the general public would be to see the two be forced to divest their network eg they merge the customers and sell sprints network to someone like Spectrum, Xfinity or Dish.

9. tokuzumi

Posts: 1918; Member since: Aug 27, 2009

Boost is being sold. That becomes the 4th carrier. Problem solved.

15. tuminatr

Posts: 1141; Member since: Feb 23, 2009

Boost uses Sprints network so they are not a carrier they are a reseller

10. TBomb

Posts: 1549; Member since: Dec 28, 2012

Just a roadblock to make the merger not happen is my guess

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.