It's deja vu for T-Mobile as DOJ reportedly kills Sprint merger

It's deja vu for T-Mobile as DOJ reportedly kills Sprint merger
On April 29th, it will have been one year since T-Mobile and Sprint announced a $26.5 billion merger. For the transaction to close, both the FCC and the DOJ must sign off on it, but that now looks like a long shot. Citing people familiar with the situation, the Wall Street Journal says that members of the Justice Department's antitrust division have told both carriers that the deal, as presently structured, is unlikely to be approved.

The problem that the DOJ's antitrust unit has with the deal is that it could lessen competition in the wireless business by dropping the number of major providers from four to three. As we've pointed out before, this could be looked at both ways. After all, a stronger number three carrier in the form of a merged T-Mobile-Sprint could prevent Verizon and AT&T from raising prices. 

In 2011, AT&T pulled out of a $39 billion deal to buy T-Mobile after the merger was blocked by the Justice Department. Three years later, T-Mobile and Sprint decided not to merge after having exploratory talks with the FCC and DOJ. But with the currently proposed deal, both T-Mobile and Sprint at first pitched the merger directly to President Trump as necessary to provide competition to Verizon and AT&T when it comes to the rollout of 5G wireless service in the U.S.

T-Mobile CEO John Legere says that the story in the Journal is "untrue," and T-Mobile executives have been expecting the merger to close before the end of July. That is later than the originally hoped for April closing, but twice the FCC had to temporarily halt its review of the deal. One time was due to the government shutdown, and the other time was due to new information about the merger filed by T-Mobile.

While those critical of the deal worried about job losses, Legere has said that the merger would add to the head count from day one. Store closings and the synergy created by the merger might have normally led to more firings than hirings, but Legere has pointed out that the combined T-Mobile-Sprint would have 130 million customers requiring a hike in customer service personnel. New hires will be needed to staff additional customer service centers, and 600 new stores will open in rural areas and small towns not presently serviced by T-Mobile or Sprint. With that in mind, Legere says that the combined company will hire 11,000 more people by 2024 than if both remain individual carriers.

The news came out after the 4 pm EDT close of U.S. stock markets. In after-hours trading, Sprint was down 8% to $5.53 a share while T-Mobile declined by more than 4% to $71.

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14 Comments

1. Blazers

Posts: 751; Member since: Dec 05, 2011

So AT$T can buy Time Warner with no conditions, but this merger is anti-competitive? This is completely political.

2. TechNeck

Posts: 656; Member since: Aug 29, 2014

This is completely hypocritical and they are doing this because it benefits them in some way. I don't know why politics have to be involved in everything.

5. FLOGROWN

Posts: 58; Member since: Oct 25, 2018

It is like ATT n Tmo merger was too

11. Rampage_Taco

Posts: 1081; Member since: Jan 17, 2017

Let's not forget they gladly approved the Disney/Fox merger, so long as FOX sold off their few regional sports channels, because sports broadcasting was the only Market that Disney would've gained a large advantage in with the merger... What it comes down to is Legere probably didn't grease enough pockets

14. DarthJarJar

Posts: 62; Member since: Feb 01, 2018

No, it breaks anti-trust. A few examples: Sprint is selling their HQ which raises eyesbrows, They are also removing their prepaid brand virgin mobile and boost mobile from third party sellers like Best Buy, and their newer locations are actually designed like Tmobile stores (i.e. Lights which can easily be changed to purple just like tmobile locations). Sprint is a cancer. Their district managers and up the chain proactively encourage fraud. This is consistent across different areas as well. They encourage their reps to sell free lines without telling customers about the introductory pricing at signing. Not to mention they tack accessories that customers don't know are being financed, because reps hop back into the account after they leave and sign for them.

3. CDexterWard

Posts: 85; Member since: Feb 05, 2018

After 2 1/2 years of Sprint, I had my fill. Would rather see them merge and bolster a carrier that is making progress instead of just kind of hanging in there at #4. I know some people get great coverage with Sprint but for every one of them I know 4-5 that left happily.

4. djcody

Posts: 228; Member since: Apr 17, 2013

Damn greedy softbank. Was thinking to get easy pass, just because you have money doesn't mean you get more doing nothing. Get your ass to work softbank and upgrade sprint then promote something big.

6. FLOGROWN

Posts: 58; Member since: Oct 25, 2018

Is a deja vu for Sprint, they loudly opposed ATT/Tmo merger back then.

12. Rampage_Taco

Posts: 1081; Member since: Jan 17, 2017

That was when AT&T was #2 and T-mo was #4. now T-Mo is #3 and Sprint is #4.

7. LAgurl

Posts: 113; Member since: Dec 05, 2018

update this article john legere already responded and shut down all rumors saying this is NOT TRUE!

8. Subie

Posts: 2388; Member since: Aug 01, 2015

I don't think an update is necessary for that. Did you read the whole article? Here's a snippet from the fourth paragraph: "T-Mobile CEO John Legere says that the story in the Journal is "untrue,""

9. boriqua2000

Posts: 258; Member since: Mar 11, 2009

I hope they don't merge. competition is good for consumers

10. BuffaloSouce unregistered

How is it good competition when the one in last place, Sprint, refuses to upgrade their network causing them to lose a huge customer base? Sprint will be their own downfall

13. andynaija

Posts: 1262; Member since: Sep 08, 2012

I'm on T-Mobile, but I've noticed that Sprint has been upgrading their sites in the Dallas area, but their reputation definitely isn't helping their situation.

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