US: Tough road ahead for Sprint, T-Mobile

Experts warn wireless rivals Sprint and T-Mobile have a tough road ahead to secure antitrust clearance for their proposed merger that appears to be in the works, reports say.

According to analysts, share drops experienced by both companies show how competitive issues surrounding the merger, which would reduce the number of operators from four to three, show how investors’ top concern over the deal is regulatory scrutiny.

Regulators in the US have already shown skepticism about wireless consolidation, especially since the US Department of Justice blocked AT&T’s proposed acquisition of T-Mobile in 2011.

The $32 billion merger, orchestrated by Sprint owner Softbank and T-Mobile owner Deutsche Telekom, will have to convince antitrust and communications regulators that the deal would benefit consumers and not significantly harm market competition. And it’s a long shot, according to experts.

While not naming Sprint and T-Mobile specifically, DOJ assistant antitrust attorney general Bill Baer expressed last January that a major wireless merger would not easily gain approval.

”It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers,” he said.

Full content: Reuters

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