As we told you that the FCC President Ajit Pai recommended his fellow Commissioners to approve the T-Mobile-Sprint merger. With another Commissioner who said he would vote to allow the deal, the chances of closing the merger were never better. Then came the Justice Department.
Bloomberg reports that a person familiar with the Justice Department review states that the agency is inclined to vote against the transaction. The approval of both regulatory agencies is necessary for the closure of the merger.
T-Mobile and Sprint have made several concessions that have apparently impressed the FCC but not the DOJ. Operators have promised to sell Sprint’s prepaid Boost Mobile provider, which competes with T-Mobile’s MetroPCS unit and completes its national 5G distribution in three years.
Concessions are not sufficient; As per the Report
At the same time, wireless service prices would be frozen for three years after the merger. According to the report, the Justice Department believes that the concessions agreed by the carriers are not sufficient. The agency is concerned that the merger of the third and fourth carriers in the nation would reduce competition in the sector. Verizon and AT & T are the two largest wireless service providers in the country.
Unless Sprint agrees to get rid of its prepaid Virgin Mobile unit, it is unclear what else the two operators that could influence the Justice Department would agree to allow the merger to continue. The $26.5 billion deal was announced in April 2018 and has been revised ever since.
The FCC revision of the merger covers the technical and telecommunications aspects of the agreement. The DOJ has the task of determining whether consumers would be damaged by allowing the transaction to close.
Bloomberg’s flash on the Justice Department today follows a previous story published last month by the Wall Street Journal. According to this report, a Justice Department official told the T-Mobile and Sprint executives that the deal, being structured at that time, would not be approved by the Justice Department. The CEO of T-Mobile, John Legere, clearly denied the report by calling it “untrue”.
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