Skip to main content

The Justice Department might kill T-Mobile and Sprint’s merger despite likely FCC approval

The Justice Department might kill T-Mobile and Sprint’s merger despite likely FCC approval


Just hours after the FCC’s chairman said he approved of the deal

Share this story

Sprint / T-Mobile
Photo by Chris Welch / The Verge

T-Mobile and Sprint started the day with very good news when FCC chairman Ajit Pai said he would urge the commission to approve their industry-transforming merger. Stocks of both companies soared soon after. But only a few hours later, Bloomberg is reporting that the US Department of Justice is leaning toward blocking the merger over antitrust concerns. This isn’t the first time we’ve heard that the Justice Department remains unconvinced that a combined T-Mobile and Sprint would be a positive development for consumers.

Citing a person familiar with the DoJ’s ongoing merger review, Bloomberg says that “the remedies proposed by the companies don’t go far enough to resolve antitrust concerns.” T-Mobile and Sprint agreed to several “enforceable” commitments and milestones on 5G deployment throughout the US in order to gain the FCC’s thumbs-up on the deal; Boost Mobile will also be sold off if the merger is successful. In a video, T-Mobile CEO John Legere insisted that the combined company would face hefty financial penalties if it fails to meet those 5G buildout goals. He also again pledged that consumers wouldn’t face higher mobile plan prices for at least three years.

But the Justice Department’s antitrust division is the crucial hurdle — and a bigger one than the FCC in this case — that T-Mobile and Sprint must overcome if they want to see the $26.5 billion merger through. Those same conditions that Pai found acceptable might not be enough to get a stamp of approval from antitrust officials. Trading of Sprint’s stock was briefly halted for volatility on Monday afternoon after Bloomberg’s story was published.

Both T-Mobile and Sprint say their coming together is critical for the United States to be a leader in 5G mobile networking and to present a more formidable competitor to larger rivals Verizon Wireless and AT&T. Critics maintain that shrinking the number of major US mobile providers from four down to three will result in higher prices and lost jobs, regardless of what T-Mobile and Sprint are promising. When The Wall Street Journal originally reported that the Justice Department was turning against the merger, Legere and Sprint CEO Marcelo Claure strongly pushed back against the story and claimed it was inaccurate. But now Bloomberg is corroborating that this thing is still far from a certainty.