Just a few hours after FCC chairman Ajit Pai said he would urge the commission to approve T-Mobile and Sprint merger, it was remored that the US Department of Justice was thinking of blocking the operation over anti-trust concerns. It now turns out that that’s exactly what the DOJ plans to do. The DoJ doubts that a merged T-Mobile-Sprint would bring any positive change for the consumers.
According to Reuters, a person familiar with the Justice Department’s review of the merger, says that “the remedies proposed by the companies don’t go far enough to resolve antitrust concerns.”
The two companies agreed on various milestones over 5G’s development across the country in order to cut a deal with the FCC. If the merger will be approved, Boost Mobile will also be sold off. T-Mobile CEO’s John Legere mentioned in a video that his company and Sprint would face huge financial penalties if the 5G milestones were to be missed and that he is committed not to increase mobile plan costs for at least three years.
However, the biggest obstacle – greater than the FCC in this instance – to T-Mobile and Sprint $26.5 billion merger remains the antitrust division of the US Department of Justice. The conditions that the two companies proposed might be good enough for FCC’c chairman Ajit Pai, but not enough to get the final approval from DoJ’s antitrust department.
On Monday afternoon trading of Sprint’s stock had to be halted briefly for volatility.
According to Sprint and T-Mobile, the merger is crucial for the United States to be a leader in 5G mobile network development, and to introduce a stronger competitor to the bigger rivals such as AT&T and Verizon. Critics comment that the merger would actually reduce the number of major US mobile provides from four to three, resulting in higher prices and lost jobs, independently from T-Mobile and Sprint promises.
John Legere and Sprint CEO Marcelo Claure strongly pushed back against The Wall Street Journal when it first reported that the Justice Department was cautious about the merger, claiming that the story was inaccurate. But now there is another voice that reminds the two CEOs that the merger is far from being a fact.