Planned T-Mobile-Sprint merger reportedly unlikely to pass DOJ scrutiny, T-Mobile CEO Lege...

Posted:
in General Discussion edited April 16
A report on Tuesday claims the U.S. Department of Justice in April told T-Mobile and Sprint that a planned merger will not pass muster as currently structured, putting the massive $26 billion deal in jeopardy.

New T-Mobile
Sprint CEO Marcelo Claure (left) and T-Mobile CEO John Legere present "New T-Mobile" merger.


DOJ antitrust staffers informed T-Mobile and Sprint of their concerns in a meeting earlier this month, questioning whether the resulting entity would indeed reap benefits touted by both sides, reports The Wall Street Journal. Of note, the companies argue a merger is needed to roll out critical next-generation 5G network infrastructure, technology deemed essential to stay abreast of competitors Verizon and AT&T.

Citing an unnamed source, the publication claims state attorneys general are also looking into the matter, with some antitrust officials planning to challenge the merger independent of federal action. These state players supposedly share qualms with the Justice Department.

In addition to the DOJ and state AGs, the Federal Communications Commission is also delving into details of the proposal, the report said. At issue are calculated cost savings and how, exactly, the resulting company would offer home broadband service to consumers using wireless infrastructure.

The various government groups evaluating the T-Mobile-Sprint deal could have a final decision in a several weeks, sources said. The report notes DOJ staff recommendations can be accepted or denied by the department's leadership.

For its part, T-Mobile CEO John Legere refutes the WSJ report, saying the gist of the story is "untrue."

"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," Legere said in a tweet. "This continues to be our policy since we announced our merger last year."

The tweet includes a link to a website dedicated to the merger, dubbed "The New T-Mobile, which includes a list of benefits consumers can expect, as well as facts and figures related to the tie-up and the wider mobile industry.

T-Mobile and Sprint first announced the all-stock merger in 2018, proposing a single combined entity capable of competing against Verizon and AT&T's long-standing duopoly. The companies in a mandatory FCC filing last year promised to invest $40 billion toward delivering "a robust, nationwide world-class 5G network and services sooner than otherwise possible."

Comments

  • Reply 1 of 8
    I don't see how the DOJ could care about this merger. It seems like it really would benefit the general public. What they should have blocked were the latest ISP and content mergers. AT&T and Verizon have both taken tens of billions of dollars from the politicians and promised the moon. I'm still not living on the moon.

    I can see it now, it will be just like WALL-E, one megacorporation that controls everything. We're well on our way…The top five corps now basically control everything you see – Comcast | Disney | AT&T | CBS | Viacom.

    I'm glad I'm getting older and won't have to deal with all the *!#@ in the world for too much longer.
    buckaleccornchip
  • Reply 2 of 8
    chasmchasm Posts: 1,415member
    “But but but ... I spent all that money on hotel rooms at Trump properties!” cries Legere. 😜

    But more seriously ... the WSJ is still a decent business paper, but let the record show their stories on tech tend to fall short (not Bloomberg’s “just make stuff up” approach, mind you, but rather a lot of rumour repeating without any verification). I’m inclined to believe this one as there are indeed some concerns, but unless T-Mob and Sprint can show that they’ll be going out of business without this merger (Sprint seems more likely in that scenario), I think T-Mob has shown that they could indeed go it alone successfully if they had to.

    I don’t dislike T-Mob, but I’m pretty damn sick of their magenta fetish. Mind you, Sprint’s fondness for bright yellow isn’t really any better ...
    edited April 16
  • Reply 3 of 8
    MplsPMplsP Posts: 1,296member
    Honestly, this administration hasn't seen a business deal or merger it didn't like so I can't see the DOJ giving a rat's patootie about this merger.
  • Reply 4 of 8
    Thank @#$& God!

    I’m a T-Mobile customer, and ever since the deal was announced (and they started the backend integration) the signal/connection has gone to @#$.

    Rather than taking on Sprint’s trash and debt, they should buy whatever spectrum they need and upgrade the equipment.  I don’t care about 5G... How about more reliable 4G.

    I’ve tried Sprint (after having a sim issue on my iPad), I’ve NEVER dealt with a worse company.  There’s nothing good about the company, not the network, not customer support, not billing.  I don’t know how they’re in business... DIE Sprint DIE.  The world would be a better place...
  • Reply 5 of 8
    MplsP said:
    Honestly, this administration hasn't seen a business deal or merger it didn't like so I can't see the DOJ giving a rat's patootie about this merger.
    Verizon bought more politicians, it’s not complicated.
    cornchip
  • Reply 6 of 8
    payecopayeco Posts: 296member
    MplsP said:
    Honestly, this administration hasn't seen a business deal or merger it didn't like so I can't see the DOJ giving a rat's patootie about this merger.
    Are you serious? They fought the AT&T/Time Warner deal tooth and nail from day one. Sure, it was for childish reasons (Trump doesn’t like CNN) but they still fought it, and then appealed the ruling when it didn’t go their way.
  • Reply 7 of 8
    tyler82tyler82 Posts: 836member
    I admire a CEO that looks like an aging 80s rock lead guitarist 
    cornchip
  • Reply 8 of 8
    I’m glad that Sprint is feeling what happens when someone whines about merging. 

    They objected when At&t tried to merge with T-Mobile years ago and now they’re getting a taste of their own medicine. 
    cornchip
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