T-Mobile and Sprint Merger Unlikely to Be Approved as Currently Structured [Updated]

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United States Justice Department staff members told Sprint and T-Mobile that their planned merger is unlikely to be approved as it is currently structured, reports The Wall Street Journal.

The merger agreement between the two companies hinges on approval from the Justice Department's antitrust division, which has been exploring whether the deal would result in a major threat to competition.

In a meeting earlier this month, Justice Department staff members laid out their concerns with the all-stock deal and questioned the companies' arguments that the combination would produce important efficiencies for the merged firm, the people said.
Sprint and T-Mobile have other hurdles to overcome as well. Multiple state attorneys are prepared to launch lawsuits if the Justice Department doesn't end up challenging the merger, according to sources that spoke to The Wall Street Journal.

The FCC has also been asking the two companies for more information on topics like cost savings and wireless infrastructure plans.

A final decision "likely several weeks away" and ultimately, the staff position on the matter is a recommendation that can be overruled by the Justice Department leaders.

Discussions are ongoing and Sprint and T-Mobile may be willing to offer concessions that include assets sales to get the government to approve the merger plans.

T-Mobile and Sprint first announced plans for a merger in April 2018. If approved, the merger will combine two of the four major carriers in the United States, giving the new company nearly 100 million customers.

Update: According to T-Mobile CEO John Legere, the "premise" of the WSJ's story is untrue, though Legere declined to provide additional details.

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/N5YvuuJtPZ - John Legere (@JohnLegere) April 16, 2019


Article Link: T-Mobile and Sprint Merger Unlikely to Be Approved as Currently Structured [Updated]
 

macduke

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Major threat to what competition? The two huge giants of AT&T and Verizon that already rule the land with an iron fist? I think a third player who is about the size of the two giants will be able to provide more competition than we have today. And let's face it—if somebody doesn't buy up Sprint they're just going to go bankrupt eventually and who do you think will be the highest bidders for their spectrum and infrastructure? AT&T and Verizon. I think T-Mobile has proven that they're more consumer friendly than anyone else out there. They just need to build up their network more.
 

PastaPrimav

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I hope it gets flatly denied, honestly.

Not that I really like government interference, but this merger just causes more of the same problem. Why wouldn't T-Mobile and Sprint want to continue operating as separately profitable entities? Because their only competition is 2 gigantic, overly large companies.

They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.
 

nawnp

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They have been at this for a year now, and "New T-mobile" has promised no job losses and 3 years of consistent pricing on top of building up a 5g Network as soon as possible after this. Not even mentioning the combined company would still be smaller than their competitors.
I hope it gets flatly denied, honestly.

Not that I really like government interference, but this merger just causes more of the same problem. Why wouldn't T-Mobile and Sprint want to continue operating as separately profitable entities? Because their only competition is 2 gigantic, overly large companies.

They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.
It is not a guarantee Sprint won't fail in debt if they remain separate. Making it still 3 companies but a whole lot longer, if ever for T-mobile to gain the new subscribers and assets from Sprint. Though again, not a guarantee so Sprint and T-mobile may continue to exist for a number of years after this and may be competitive even on the level of At&t and Verizon, just less likely.
 

konqerror

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They're telling us that in the shadow of AT&T and Verizon, there is barely room for both a Sprint and T-Mobile. That is ridiculous.
Many countries have only 3 carriers (Germany, Austria, Switzerland, Portugal, Norway, Greece, Belgium, China*). Many others have 3 plus a weak 4th (Canada, Japan). There aren't many countries with 4 strong carriers.

You need to support your statement with some real economic analysis.
 

JetTester

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In our area, Sprint service is pretty poor. If they are that bad everywhere, I don't see why T-Mobile would want to merge with them. Either way, not interested in their service.
 
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mcalict

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I am surprised Sprint has lasted as long as they have. They continue to leverage themselves from loans to keep going. If the deal doesn't go through, I predict Sprint will get go under in the next 2 - 3 years (if not sooner).
This ^^^.

If this deal isn't approved it's clear with Sprint's debt load they wouldn't survive as a long-term viable operation. Then we'd be left with the big 2, and a feisty, but limited resourced TMobile in 3rd. Better to have a strong 3rd consumer choice, even with the risk of an eventual elimination of redundancies, regardless of what promises are made now. Easy for me to say that last part, I know.
 

PastaPrimav

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Many countries have only 3 carriers (Germany, Austria, Switzerland, Portugal, Norway, Greece, Belgium, China*). Many others have 3 plus a weak 4th (Canada, Japan). There aren't many countries with 4 strong carriers.

You need to support your statement with some real economic analysis.
Hows this for economic analysis: Fewer companies = bad for consumers.
 
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SoN1NjA

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Major threat to what competition? The two huge giants of AT&T and Verizon that already rule the land with an iron fist? I think a third player who is about the size of the two giants will be able to provide more competition than we have today. And let's face it—if somebody doesn't buy up Sprint they're just going to go bankrupt eventually and who do you think will be the highest bidders for their spectrum and infrastructure? AT&T and Verizon. I think T-Mobile has proven that they're more consumer friendly than anyone else out there. They just need to build up their network more.
T-Mobile has to be consumer friendly, it helps them compete — almost like how health benefits at a job is kinda like pay

Look at the video games market, Xbox is being super nice because they’re the underdog, meanwhile Sony, who has a lot more sales, doesn’t feel the need to
 

scupking

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I think the government doesn't want to see 3 big players for whatever reason. Issue is like everyone else said Sprint will only have a few years left if this doesn't work out. I have T-Mobile and have been very happy with them. Switched from Verizon a few years back.
 

fairuz

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Major threat to what competition? The two huge giants of AT&T and Verizon that already rule the land with an iron fist? I think a third player who is about the size of the two giants will be able to provide more competition than we have today. And let's face it—if somebody doesn't buy up Sprint they're just going to go bankrupt eventually and who do you think will be the highest bidders for their spectrum and infrastructure? AT&T and Verizon. I think T-Mobile has proven that they're more consumer friendly than anyone else out there. They just need to build up their network more.
How is T-Mobile customer-friendly? With AT&T, I give them money, and they give me data service. Wifi calling and such works, so there aren't caveats. Only difference is T-Mobile has these "free data for certain video sites" promos that are just violations of net neutrality and more complication.
 

freddiebarnes

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In our area, Sprint service is pretty poor. If they are that bad everywhere, I don't see why T-Mobile would want to merge with them. Either way, not interested in their service.
Sprint isn’t bad everywhere. At least in my area of the Northeast, US they were great. I was with Sprint for over 10 years with hardly any problems. I just recently switched to Xfinity Mobile (they use Verizon) because and only because I’m saving a ton of money per month on my bill.

If I had to choose a new cell provider, i would go back to Sprint in a heartbeat.
 

GreenPixel

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How is T-Mobile customer-friendly? With AT&T, I give them money, and they give me data service. Wifi calling and such works, so there aren't caveats. Only difference is T-Mobile has these "free data for certain video sites" promos that are just violations of net neutrality and more complication.
T-Mobile gives me free international data/messaging in all countries I have traveled (26) with the exception of one. Last I checked, getting the same service with AT&T would have cost me many hundreds if not thousands of dollars.
 
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Sasparilla

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You can bet AT&T and Verizon would want regulators (and be trying to put their lobbying fingers on the scale as well) to deny this merger.

I'd like to see it go forward since it would get T-Mobile much closer to AT&T and Verizon in size (getting closer to 3 equal players in the market). Would expect Sprint to go down in a few years otherwise - their offshore owner has never shown an interest in building out their infrastructure on its own with AT&T and Verizon being the highest bidders on the spectrum afterwards
 

nburwell

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T-Mobile gives me free international data/messaging in all countries I have traveled (26) with the exception of one. Last I checked, getting the same service with AT&T would have cost me many hundreds if not thousands of dollars.
+1. Granted the data speeds are reduced when overseas, but your device is still usable. With AT&T or Verizon, I'd rather just use a local SIM than pay both carriers for their outrageous international data plans.

Granted when I was in Europe last year, I used an unlocked SE with local SIM and my X with my T-Mobile SIM. Although I used the SE more for maps and such, I could still text and check emails on my X - all while not having to worry about extra charges on my next bill.
 

macduke

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T-Mobile has to be consumer friendly, it helps them compete — almost like how health benefits at a job is kinda like pay

Look at the video games market, Xbox is being super nice because they’re the underdog, meanwhile Sony, who has a lot more sales, doesn’t feel the need to
Yeah, but if Sony, Microsoft, and Nintendo were roughly the same market share, I'd bet they would be competing a lot more.
[doublepost=1555514376][/doublepost]
How is T-Mobile customer-friendly? With AT&T, I give them money, and they give me data service. Wifi calling and such works, so there aren't caveats. Only difference is T-Mobile has these "free data for certain video sites" promos that are just violations of net neutrality and more complication.
Well, for starters, my monthly bill is $72-82/mo with the discounts they let me stack and I have three iPhone lines and one iPad line. They restarted the trend of unlimited data as well, with really high caps of 50GB until you're throttled, and if you use less than 2GB, they'll give you a $10 bill credit per line (which is part of why my bill is so low most of the time). When I was having issues with coverage in my basement they sent me a free range extender. The price of taxes and everything else is rolled into the bill so the only reason it changes each month by being lower if I use less data. They do a lot of promotions like T-Mobile Tuesdays where you get free tacos, ice cream, reduced gas prices, cheap movie tickets, etc and can enter to win bigger prizes. They were one of the first companies to offer robocall blocking for free, and though it only works to a certain extent, it has helped. And as for what you claim to be a net neutrality violation—any company can sign up with their binge on service and no money exchanges hands. They add more companies over time so consumers don't have to pay for optimized, lower quality streams on mobile. The only requirement is that their video streaming capability be compatible with T-Mobile's requirements. I see nothing wrong with this. The only issue I've had is that sometimes their customer service reps, especially if you get an Indian call center, are completely clueless sometimes. Any time I deal with the U.S. team, which is a lot more frequently lately as they are now assigning teams to customers (I think based out of Atlanta or somewhere in the south), it has been a much better experience and they said they are working to improve that. My coverage has also been improving a lot lately as they've been working a lot to bring new spectrum online that penetrates deeper into buildings. I've had AT&T and Verizon and with T-Mobile it's different. I can tell that they actually care and if they make a mistake they work to fix it and give you a much larger credit. For instance a few months ago I had something go weird with my account after getting my new iPad Pro added to it and they adjusted so many credits that my bill for the month was only $10.
 
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Breaking Good

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T-Mo and Spring don't compete with AT&T and Verizon because they don't have nationwide coverage like AT&T and Verizon.

To support a buildout of 5G service, any carrier is going to need a minimum subscriber base. T-Mo and Sprint can't get there separately, but combined they can.

I think the issue with the Government is low cost service in urban areas. T-Mo/Sprint is going to have to convince that they will still have a low cost option for cell service after the merger.