Can you believe that it has almost been 11 months since T-Mobile and Sprint announced their merger plans? The announcement took place on April 29th, 2018, and both companies await regulatory approval from the Justice Department and the FCC. How this shakes out right now is hard to call, especially if President Donald Trump gets involved. After all, the president wanted the AT&T purchase of Time Warner nixed because of what he perceived to be negative coverage of his presidency by Time Warner's CNN.
FCC chairman Ajit Pai is a Trump appointee and he followed the company line in having the Obama-era net neutrality rules wiped off the books. And the president considers the Justice Department to be his personal plaything, according to those inside the White House. Could Trump have some personal reason for asking his staff to intervene in the FCC or DOJ review of the merger?
If President Trump is petty enough, he could decide to block the deal because of the Twitter battle he had with T-Mobile CEO John Legere back in 2015. Legere complained about noise outside of the Trump-owned hotel he was staying in and the source of the noise was removed by hotel security. But for some reason, this upset Trump who sent a tweet complaining about T-Mobile's service and said that he didn't want T-Mobile in his buildings. Legere said that he was going to check out of the hotel, which led the future president to tweet, "T-Mobile service sucks and it took a Trump to call him (Legere) out." We should also point out that Trump insulted Legere's hair style, which is like the pot calling the kettle black.
T-Mobile executives started booking rooms and staying at the Trump International Hotel in Washington D.C. following the announcement of the merger. Jessica Rosenworcel, the lone Democrat among the four FCC commissioners sitting at the moment (the open seat is supposed to be filled by a Democrat), scolded T-Mobile for staying at the hotel, noting that the optics did not look good for the carrier.In what appeared to be an attempt to get into Trump's good graces, it was discovered back in January that
T-Mobile CEO John Legere is aware of what the optics look like for his company
A fresh report from Reuters that was published today says that a letter sent by Legere to lawmakers admits that T-Mobile spent $195,000 at the Trump International Hotel since announcing the merger with Sprint. The letter was dated February 21st and noted that the money was used to pay for "meeting space, catering, business center services, audio/visual equipment rental, lodging, meals, taxes and other incidental expenses." The missive was sent in response to questions from Senator Elizabeth Warren and Representative Pramila Jayapal, both Democrats, and both of whom sent letters to T-Mobile questioning its use of the Trump International Hotel. Nine members of the Senate have asked regulators to block the merger.
In his letter, Legere wrote that he has stayed at Trump Hotels in Chicago, New York and Washington. The executive noted that the latter property is located close to a T-Mobile office in D.C., and the DOJ. Legere does seem aware of how this looks for T-Mobile. When the media questioned all of the social media images of the executive standing inside Trump International Hotel, the CEO quickly posted pictures showing him staying at another well-known hotel in D.C.
T-Mobile executives reportedly reserved rooms for 52 nights at the Trump International Hotel after the merger announcement, a huge increase from the number of reservations it made prior to unveiling the deal. If Trump is persuaded by the amount of money that the carrier spent at his D.C. hotel to keep his nose out of the FCC and DOJ reviews of the transaction, it might be the best $195,000 that T-Mobile ever spent.
Despite many calling the odds of the deal getting approved a coin flip at this point, Legere said yesterday that he expects the merger to close this summer. If approved, the merger will reduce the number of major U.S. wireless providers to three. This worries some lawmakers who worry that this will lead to higher pricing for wireless service, and large job losses as the two firms close overlapping stores and eliminate duplicate positions.