Sprint and T-Mobile are in the final stages of a merger, nearing completion. Following extensive periods of review periods by regulators and a grueling hearing before a committee of US Representatives, a new report from The Wall Street Journal says the outcome isnít so bright.
According to people familiar with the matter, staff members of the US Department of Justice have already told T-Mobile and Sprint that the merger isnít likely to be approved in its current state. The cause is apparently the DOJís antitrust division, who is worried about the impact of the industry when four major carriers become three.
The nationís third- and fourth-biggest carriers by subscribers are facing challenges on several fronts, but their most immediate hurdle comes from the Justice Departmentís antitrust division, which is considering whether the deal would present an unacceptable threat to competition.
This was a heated topic of debate at the Congressional Hearing and it seems the DOJ is concerned about the impact on current Sprint employees and the fate of their jobs, as well as the raising of service rates following the merger, which has proven to happen in similar mergers throughout Europe.
In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companiesí arguments that the combination would produce important efficiencies for the merged firm, the people said.
Following the reportís release, Legere Tweeted in response that the premise of the story is ďsimply untrueĒ, also stating that the carrier has no further comment on the story.
The premise of this story, as summarized in the first paragraph, is simply untrue. Out of respect for the process, we have no further comment. This continues to be our policy since we announced our merger last year. https://t.co/3q9CVgkRfv key info: https://t.co/N5YvuuJtPZó John Legere (@JohnLegere) April 16, 2019
Sprint and T-Mobileís argument for the merger is that the two carriers need each other to push forward with 5G and with Sprintís accumulating debt, it needs T-Mobile so the carrier doesnít go bankrupt. Legere also claimed that the merger would drive costs down and pass the savings onto the customers.
The final decision is still several weeks away as per the report. But the two carriers are said to remain in talks with government officials and regulators. Several states will reportedly file lawsuits to block the merger for the same concerns.
Yes they are. thats why am on T-mobile even though it is frustrating sometimes being on it.
A merger like this would be all bad news for customers and employees, guaranteed. There are countless examples of these things hurting consumers; I'd like to see T-Mob/Sprint come up with even 2 examples of it improving a market.