US: DOJ leans against approving T-Mobile’s takeover of Sprint

Two federal agencies reviewing the US$26 billion Sprint/T-Mobile deal appear split in their thinking about the transaction. The US Department of Justice (DOJ) is leaning against approving T-Mobile’s proposed takeover of Sprint as the remedies proposed by the companies do not resolve antitrust concerns, reported the Washington Post. Ajit Pai, from the Federal Communications Commission (FCC) however said on Monday, May 20, that he backs the deal on Monday.

T-Mobile’s US$26 billion acquisition of rival Sprint won the support of the head of the FCCederal Communications Commission, Reuters reported on Monday. Chairman Ajit Pai said the telecom tie-up would benefit consumers by speeding up the nationwide deployment of new, ultra-fast mobile broadband service. Pai also received the backing of the FCC’s two other Republicans, positioning the merger to win the FCC’s final approval in the coming weeks.

On the other hand officials in the Antitrust Division of the DOJ, led by Makan Delrahim, remain skeptical that allowing the number of top wireless carriers to drop from four to three will help consumers, who now benefit from the pressure these rivals exert on each other to improve their prices and service offerings, reported the Washington Post.

Even if the FCC approves the merger, the Justice Department still could try to block the deal in court on grounds it threatens competition.

Federal regulators began considering the merger between T-Mobile, operated by Germany’s Deutsche Telekom, and Sprint, run by the Japanese conglomerate SoftBank, after the companies announced their plans in April 2018.