T-Mobile and Sprint started the day with very good news when FCC chairman Ajit Pai said he would urge the commission to approve their industry-transforming merger. Stocks of both companies soared soon after. But only a few hours later Bloomberg reports that a source close has said the department is not convinced that the T-Mobile/Sprint merger would favor consumer interests. Instead, officials fear that it would hurt overall competition within the market.
“The remedies proposed by the wireless carriers earlier Monday don’t go far enough to resolve the department’s concerns that the deal risks harming competition,” said the source.
https://youtu.be/-3jFdL9NtgA
The buyout was all but given the green light today when Chairman Pai said he would recommend approving the $26.5 billion deal. In their bid for approval, the two companies agreed to sell off Sprint’s Boost Mobile and committed to having 5G coverage for 85 percent of the US within three years and 90 percent within six.
“It’s hard to say that our concerns could be alleviated by that kind of tinkering.”
However, the concessions are not enough to gain DoJ approval. Many are concerned that permanently eliminating one of the four major carriers in the US will work only to drive prices up as the already limited competition will be further restricted.
“It’s hard to say that our concerns could be alleviated by that kind of tinkering,” Maryland Attorney General Brian Frosh said of the deal. “It means that consumers are going to suffer in terms of price, in terms of quality, in terms of opportunities.”
Both T-Mobile and Sprint say their coming together is critical for the United States to be a leader in 5G mobile networking and to present a more formidable competitor to larger rivals Verizon Wireless and AT&T. Critics maintain that shrinking the number of major US mobile providers from four down to three will result in higher prices and lost jobs, regardless of what T-Mobile and Sprint are promising. When The Wall Street Journal originally reported that the Justice Department was turning against the merger, Legere and Sprint CEO Marcelo Claure strongly pushed back against the story and claimed it was inaccurate. But now Bloomberg is corroborating that this thing is still far from a certainty.
