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Trouble looms for T-Mobile, Sprint from U.S. Department of Justice

by Justin Herrick | October 12, 2017October 12, 2017 2:00 pm PST

An announcement regarding the long-rumored merger between T-Mobile and Sprint should come within the next couple of weeks, but that doesn’t mean anything is official. Both carriers’ parent companies have a lot of work to do before the brands become one. The toughest thing to accomplish will be proving the combination of T-Mobile and Sprint is beneficial for consumers.

Deutsche Telekom and SoftBank are expected to face intense scrutiny to the point where they probably won’t get a vote of confidence from one major department of the government.

The U.S. Department of Justice, according to Reuters, plans to oppose the deal on the basis that the number of carriers in the wireless industry should not be condensing. Those in charge of antitrust review within the department would reportedly like to keep T-Mobile running on its own as it continues peeling customers away from Verizon and AT&T. If T-Mobile and Sprint merge, consumers lose choice and could be bullied by just three carriers.

T-Mobile is the nation’s third-largest carrier while Verizon and AT&T are still in the lead and have been for many years. Sprint, meanwhile, is in fourth place. Together they cover over 98% of the market in the country. More than 411 million customers belong to Verizon, AT&T, T-Mobile, and Sprint.

Ultimately, however, it’ll be up to just one person deciding on the merger. Makan Delrahim, who was appointed by President Donald Trump in September, handles all merger and acquisitions. Being that the current administration is very pro-business, it’s hard to imagine the U.S. government stopping T-Mobile and Sprint from merging. Still, the Department of Justice, as well as members of Congress, will bring on strong resistance.

The argument made by Deutsche Telekom and SoftBank will be that the wireless industry is incredibly competitive. By combining the two carriers, the new company can offer more value to consumers than its competitors.

Reuters

Justin Herrick

Justin is easily attracted to power buttons. His interest in technology started as a child in the 1990s with the original PlayStation, and two...

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