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T-Mobile/Sprint merger in danger of not being approved

The Wall Street Journal reported today that the U.S. Department of Justice is unlikely to approve the planned merger between T-Mobile and Sprint as it’s currently structured. T-Mobile and Sprint agreed to merge under the T-Mobile banner back in April 2018.

According to people familiar with the matter, the DOJ’s antitrust division is concerned that the merger would threaten competition in the market. T-Mobile and Sprint previously insisted that the merger would create jobs and lead to improved networks.

Also, DOJ officials reportedly questioned T-Mobile and Sprint’s claims that the merger would lead to important efficiencies. For example, T-Mobile claims that its 5G home internet service is only possible if it merges with Sprint. Sprint, meanwhile, posits that the merger would allow the new T-Mobile to better compete against AT&T and Verizon.

Compounding matters, “some” state antitrust officials reportedly share the DOJ’s concerns. The officials are also reportedly prepared to sue T-Mobile and Sprint if federal officials don’t help them to challenge the proposed merger.

A final decision on the matter isn’t reportedly slated to come down for several weeks. That said, the Federal Communications Commission (FCC) is also looking into the proposed merger and wants to nail down some logistics, such as possible cost savings and how the merger would provide home broadband service.

Discussions between the two carriers and government officials are reportedly ongoing. There’s a possibility that T-Mobile and Sprint will offer concessions to ease the government’s worries. There’s also a possibility that DOJ leaders could override the agency’s position on the merger.

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