T-Mobile and Sprint asked for another extension of their proposed merger approval timeframe, seeing as most analysts are now placing the possibility between 33%-50%, down from nearly 90% just a few months ago.
Leaving Sprint to hobble along is not an ideal solution, so the merger could be approved, after all, but in a different form and with different guarantees than the deal is proposing now. That is why we asked you last week if you are for or against the deal, and whether you would like the current DoJ push for blocking it to materialize.
Despite the potential for job losses, price hikes, and thinning the competitive landscape that caused a political and union outcry, most of you are rooting for the new T-Mobile or a deal revamp. Less than a third want the deal actually blocked which is an encouraging sign of trust into the promises of CEO John Legere about prices and jobs after the merger.
The triple jeopardy over the T-Mobile-Sprint merger
is threatening the deal's very existence, though. T-Mobile's parent company and using Huawei equipment is in the spotlight, but it seems that the Department of Justice is more focused on the pricing cartel and employment effects, meeting with T-Mobile and Sprint officials last week to discuss the pros and cons of the proposed merger.
The odds have swung in favor of a no deal, say analysts. Too many political points are to be scored against the deal than for it, for instance. Besides the usual "letters of concern" from the competition, Senators like Amy Klobuchar, Kirsten Gillibrand, Elizabeth Warren, Cory Booker and Bernie Sanders have also written on to DoJ and the FCC to state that the deal will "raise prices for consumers, harm workers, stifle competition, exacerbate the digital divide, and undermine innovation." In addition, we have 37 Members of Congress penning a similar letter, calling the merger "a bad deal for the American people."
Back in the fall, the competition had reportedly given up on derailing it, and is actually trying to push through conditions that will benefit it when the merger goes through. C-Spire, for instance, met with FCC reps, and reiterated their desire for checks and balances on the resulting third-largest US carrier.
On the other hand, there is a growing concern among the national security apparatus that, besides the usual arguments for job losses and price hikes, the merger will be a nightmare scenario in light of the Red Menace attitude towards China in Washington now.
Protect America, for instance, an advocacy group of current and former foreign policy and national security experts that was found last fall, is lobbying tooth and nail against the deal on account of the "foreign ownership interests in a combined Sprint-T-Mobile."
T-Mobile argued that the new entity will be lowering prices and won't charge extra for 5G, in order to poach customers from the big two - Verizon and AT&T.
T-Mobile and Sprint exhibited the pros and cons of the merger for the FCC last week
That's good news for consumers but after the initial amassing of new customers is completed a year or two down the road, nothing could prevent a price creep and/or cost cutting measures for achieving economies of scale, i.e. layoffs. If anyone could deliver the merger against the current poor odds, however, that's John Legere, whose flamboyant and customer-centric style has been proven in battle numerous times already.
T-Mobile's CEO, the COO Mike Sievert, and CTO Neville Ray, as well as Sprint's executive chairman Marcelo Claure, already met with the FCC commissioner Jessica Rosenworcel this past week to lay down their counterclaims, and have now asked for a merger delay to sort it all out.