The US Department of Justice (DoJ) could ask Sprint and T-Mobile US to spin off a company capable of becoming a new national competitor as a requirement for their proposed merger, Bloomberg reported.
The condition, which remains under consideration, would help preserve the presence of four major players in the wireless market and address concerns about the deal’s impact on competition. It is unclear, though, whether the operators would consent to such a remedy.
Sprint and T-Mobile already agreed to sell the former’s Boost Mobile prepaid brand to win support from the Federal Communications Commission (FCC). However, the pair’s concessions to the FCC reportedly failed to impress regulators at the DoJ, which has yet to endorse the transaction.
In 2011, the DoJ sued to prevent AT&T’s proposed $39 billion acquisition of T-Mobile, arguing four national competitors were needed in the mobile market.
Altice USA, which plans to launch wireless service via an MVNO deal with Sprint, also turned its nose up at the concessions extracted by the FCC.
In a filing made just after FCC Chairman Ajit Pai announced his support for the deal, the cable company said the commitments “offer nothing new to Altice” and failed to address its concerns about the deal’s impact on the wireless wholesale market.
“The fact that T-Mobile felt the need to make an explicit commitment to negotiate a competitive wholesale agreement confirms Altice’s concern that absent specific commitments to do so, New T-Mobile will not offer competitive wholesale agreements in a post-merger world.”
It reiterated its stance that the deal should be denied unless the pair agree to divest spectrum assets and extend existing MVNO agreements for 10 years after the merger’s close.Subscribe to our daily newsletter Back