US Justice Department allegedly wants new spinoff carrier as condition of Sprint & T-Mobil...

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in iPhone
The U.S. Department of Justice is reportedly adding an unusual request for the proposed merger between T-Mobile and Sprint -- the spinoff of a new wireless carrier.

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The existing carriers are still discussing concessions that could appease the DOJ, Bloomberg sources said. Past reports have indicated Department resistance, given antitrust concerns -- there are just four major national carriers in the U.S., a number that could shrink down to three.

It's unknown what a spinoff carrier might look like except that it would run on the Sprint/T-Mobile network, Bloomberg noted.

The companies have already tendered several concessions, such as selling off Sprint's Boost Mobile brand, committing to a three-year 5G expansion, and avoiding price hikes while that network is under construction. The new entity would still control Metro and Virgin Mobile USA however, giving it huge influence over both the postpaid and prepaid markets.

The deal is valued at about $26.5 billion and already has the backing of FCC chairman Ajit Pai. Both the FCC and the DOJ must sign off ahead of Sprint and T-Mobile's self-imposed July 29 deadline.
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Comments

  • Reply 1 of 32
    krreagan2krreagan2 Posts: 75member
    I don't see any good for the consumer (American citizen) from this merger!
    racerhomie3georgie01ktappeRoger_Fingassdw2001jbdragonStrangeDaysdysamoria
  • Reply 2 of 32
    cornchipcornchip Posts: 1,856member
    As long as my $94mo bill doesn’t go up & my service continues to improve I don’t see the problem. Spinoff carrier? Wth are they smoking?
    SoundJudgmentSpamSandwichdesignrn2itivguyrepressthis
  • Reply 3 of 32
    At least they are still talking with the DOJ. So all is not lost, even with this weird 'request.'
  • Reply 4 of 32
    While it would be nice to have a 4th national carrier, if the government was truly serious about that, it might want to see if Verizon and AT&T would want to (or maybe be forced to?) contribute to it as well, given that a combined T-Mobile and Sprint would still have fewer subscribers than either of the top two. Handcuffing the 3rd and 4th carrier only prolongs the strength of nos. 1 and 2.
    cornchiprepressthisdanh
  • Reply 5 of 32
    ktappektappe Posts: 808member
    cornchip said:
    As long as my $94mo bill doesn’t go up & my service continues to improve I don’t see the problem.

    A merger lowers their incentive to do what you want. With less competition, why would they not raise your bill and why would they have an interest in improving service???
    tyler82beowulfschmidtAI_liasRayerjbdragonStrangeDaysdysamoria
  • Reply 6 of 32
    ronnronn Posts: 448member
    If the merged company is saddled with too many concessions, it will doom its chances against AT&T and Verizon. All three carriers (assuming the merger is eventually allowed) should have penalties and givebacks for failing to implement 5G in a timely and cost effective fashion. 
    repressthis
  • Reply 7 of 32
    MplsPMplsP Posts: 3,250member
    krreagan2 said:
    I don't see any good for the consumer (American citizen) from this merger!
    Sprint is on life support and T-mobile has indicated it can’t stay viable long-term in the US market. The exit of these two would leave a duopoly of Verizon and AT&T - both of which have had consistently higher rates.

    We have t-mobile and I’m happy with them for the most part. Their billing practices are much more transparent and better than AT&T or Verizon and I hope they stay in the market. This request by the DOJ doesn’t make any sense to me though - They’re ok with two companies merging as long as they spin off another company making...two companies. What’s the point?
    ronndesignrn2itivguy
  • Reply 8 of 32
    SpamSandwichSpamSandwich Posts: 33,408member
    While it would be nice to have a 4th national carrier, if the government was truly serious about that, it might want to see if Verizon and AT&T would want to (or maybe be forced to?) contribute to it as well, given that a combined T-Mobile and Sprint would still have fewer subscribers than either of the top two. Handcuffing the 3rd and 4th carrier only prolongs the strength of nos. 1 and 2.
    If the Federal government got serious about competition, it would deregulate to a far greater degree. Regulations and protections from real competition are what cause monopolies, not free markets.
    designrbeowulfschmidtdewmelongpath
  • Reply 9 of 32
    christopher126christopher126 Posts: 4,365member
    I detest Sprint...

    I buy an iPhone and Sprint charges me $2.99/mo for Visual Voicemail.

    VVM is a feature on the iPhone!

    Give me a break!

    Do not allow this merger! :)
  • Reply 10 of 32
    steepedrosteepedro Posts: 1unconfirmed, member
    without regulation, businesses would form monopolies asap.. its the easiest way to raise profits.. and that is all a company wants.
    djames4242tyler82fastasleepRayermike eggleston
  • Reply 11 of 32
    fastasleepfastasleep Posts: 5,689member
    While it would be nice to have a 4th national carrier, if the government was truly serious about that, it might want to see if Verizon and AT&T would want to (or maybe be forced to?) contribute to it as well, given that a combined T-Mobile and Sprint would still have fewer subscribers than either of the top two. Handcuffing the 3rd and 4th carrier only prolongs the strength of nos. 1 and 2.
    If the Federal government got serious about competition, it would deregulate to a far greater degree. Regulations and protections from real competition are what cause monopolies, not free markets.
    It’s weird how you keep posting this here when nobody agrees with you. 
    n2itivguyStrangeDaystokyojimuronn
  • Reply 12 of 32
    fastasleepfastasleep Posts: 5,689member

    I detest Sprint...

    I buy an iPhone and Sprint charges me $2.99/mo for Visual Voicemail.

    VVM is a feature on the iPhone!

    Give me a break!

    Do not allow this merger! :)
    How about stop using Sprint?
    MplsPn2itivguydanhronn
  • Reply 13 of 32
    The telecom behemoths of the United States have delivered the 30th fastest average 4G speeds in the world to their customers. You have to figure it can't get much worse if the U.S. is already trailing Serbia and Bulgaria, right? Ajit Pai, amirite? 
    StrangeDays
  • Reply 14 of 32
    lkrupplkrupp Posts: 9,452member
    How many actual mobile networks are there? Who actually owns the towers, the equipment, the routers? Aren’t most of the carriers just riding on AT&T's and Verizon's physical networks. Does T-Mobile have its own towers? How about Sprint?
  • Reply 15 of 32
    lkrupplkrupp Posts: 9,452member
    The telecom behemoths of the United States have delivered the 30th fastest average 4G speeds in the world to their customers. You have to figure it can't get much worse if the U.S. is already trailing Serbia and Bulgaria, right? Ajit Pai, amirite? 
    What are the populations of Serbia and Bulgaria, of Japan and South Korea compared to the United States? They have a fraction of the population the U.S. has. The U.S. is a vast, sprawling country millions of square miles in size. The U.S. has over 300 million people for mobile networks to potentially serve. So I believe your equivalence claim is a false one. Of course Bulgaria has better 4G speeds because they serve a small population, a good percentage of which may not even own a smartphone.
    sdw2001ronn
  • Reply 16 of 32
    sdw2001sdw2001 Posts: 17,668member
    I think being skeptical about this merger is appropriate.  We have a situation where there isn't much actual competition for wireless services.  ATT and VZ are the main players, with T Mobile and Spring being 2nd tier operators.  If it does go through, various concessions would seem to be prudent.  
    ronn
  • Reply 17 of 32
    sdw2001sdw2001 Posts: 17,668member
    steepedro said:
    without regulation, businesses would form monopolies asap.. its the easiest way to raise profits.. and that is all a company wants.

    I don't agree with any of that.  First, without what regulation?  Are you just talking anti-trust?  Anti-trust actions are quite rare.  Monopolies themselves are not illegal....they have to violate the law.  Secondly, creating a monopoly is not "the easiest way to raise profits."  Millions of businesses compete in the free market system.  The easiest way to make a profit is to have a great product, good marketing, and solid cost control.  Apple didn't make its hundreds of billions in profit over the last 20 years by being a monopoly.  They were selling the right thing and managing their business the right way.   Monopolies can lead to increased profit, obviously.  This is why we need to be vigilant for illegal monopolies.  But regulation?  It's not clear that "regulation" is beneficial in most cases. 


    christopher126
  • Reply 18 of 32
    christopher126christopher126 Posts: 4,365member

    I detest Sprint...

    I buy an iPhone and Sprint charges me $2.99/mo for Visual Voicemail.

    VVM is a feature on the iPhone!

    Give me a break!

    Do not allow this merger! :)
    How about stop using Sprint?
    You're missing the point!
  • Reply 19 of 32
    mrboba1mrboba1 Posts: 276member
    If they were serious about competition, they would not be dinging the 3rd and 4th place providers, they would be doing something about the behemoths at the top of the chain buying up resources (spectrum, for instance) to raise the barriers to entry into this market. High barriers to entry is what causes monopolies to be able to form, and when the companies themselves are creating this barrier, that is when the problems start.

    As it stands, Sprint is already all but dead by itself, and if T-Mobile can't level up, we will be left with ATT and VZN because of this. Making a different 4th entity is like cutting another slice of pie from a normal one when the rest of the pie is sitting there untouched.
    n2itivguydysamoriaronn
  • Reply 20 of 32
    SpamSandwichSpamSandwich Posts: 33,408member
    I detest Sprint...

    I buy an iPhone and Sprint charges me $2.99/mo for Visual Voicemail.

    VVM is a feature on the iPhone!

    Give me a break!

    Do not allow this merger! :)
    You just provided the counter-argument for your own position by example. If T-mobile were to adopt Sprint’s visual voicemail position, they’d instantly be uncompetitive. T-mobile would obviously drop those Sprint charges because they would be a single company able to leverage their coverage and customer base to compete better.
    longpathronn
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