Sprint, DoJ meeting casts doubt on T-Mobile acquisition

Sprint, DoJ meeting casts doubt on T-Mobile acquisition

Summary: A meeting between the Justice Department and Sprint officials has cast doubt on the future of a merger.

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A meeting between U.S. Justice Department officials and Sprint board members has done little to ease the passage of a potential acquisition of T-Mobile by the rival carrier.

According to Wall Street Journal sources, board members Masayoshi Son and Dan Hesse met with DoJ officials to discuss the interest in a potential buyout of T-Mobile by Sprint, which would leave U.S. consumers with a choice of three major carriers.

Masayoshi Son, CEO of SoftBank, purchased a majority stake in Sprint last year. Deutsche Telekom owns a majority stake in T-Mobile, and according to rumors, the firms have been in talks over a potential merger.

Sprint, the third-largest U.S. carrier by subscriber numbers, is interested in acquiring T-Mobile, the fourth largest which has recently boosted customer numbers through aggressive price plans and low handset costs. In Q3 2013 alone, the firm managed to bring an additional 650,000 subscribers to the fold.

According to people with knowledge of the meeting, U.S. antitrust regulators are concerned that consolidation of the companies could result in a less competitive market, and therefore potential acquisitions "could face regulatory difficulties."

"In April, the Justice Department wrote in a comment letter to the FCC that the four wireless carriers competed in ways that are important to consumers. The FCC has sent similar signals." the journal says.

William J. Baer, assistant attorney general for the antitrust division of the Justice Department, recently said that consumers enjoy more "favorable competitive conditions" since a merger between T-Mobile and Sprint was blocked three years ago. Since this moment, T-Mobile has touted itself as the "uncarrier," creating attractive price plans and 'contracts' for consumers -- which has forced its rivals to follow suit, giving consumers more choice and extended options.

In order for acquisitions to go ahead, the U.S. Justice Department must give companies permission, but as the market is currently competitive, it will only do so if the deal is believed to benefit U.S. consumers.

Topics: Broadband, Mobility, Networking

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6 comments
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  • Competitive?

    For the record, I'd hesitate to call the current market competitive. Yeah, T-Mobile is (thankfully) shaking things up (heck, I just switched to them), but it's not "competitive" yet.

    The government has this one right though--let T-Mobile KEEP shaking things up, and we might see some genuine competition for the first time in a very long time! :-)
    QMaverick
  • 3 Years ago?

    Wasn't the merger 3 years ago w/ AT&T and not Sprint?
    THavoc
  • I've used all of them

    Over the years, I've used all of the major carriers (AT&T, Cingular (now AT&T), Verizon, T-Mobile and Sprint) and have never been happy with their pricing/plans/service. I've moved over to Virgin Mobile which is $35 flat and gives me all the features I need.

    However, it's still not great. Virgin Mobile is owned by Sprint and you still get terrible service.

    Lack of competition is a bad thing, I hope no mergers will be allowed.
    Goobee
    • Out of the big 4

      I have not used T-Mobile. I have a work phone (that my employer pays for) that is on VZW's network and a personal phone on AT&T and AT&T works really well at work and VZW works okay at home where AT&T won't without a microcell.

      Sprint - Sprint sucked out loud. The only reason I stuck with them so long was the killer plan I had. Their service was very hit or miss, their CS sucked out loud, and they tried on several occasions to charge me for some business internet plan when my plan included unlimited internet. The only reason I was even with them was because I was a victim of the Sprint/Nextel merger.
      athynz
  • If Two's Company and Three's a Crowd...

    Four seems like too many on a national scale. T-Mobile got a big boatload of cash after the Feds dropped the hammer on the AT&T deal, otherwise they'd be struggling HARD. This seems like a time when three is the right number, and four means that two of them are going to be hurting.
    m0o0o0o0o
  • Four is the right number

    The existence of four major carriers helps customers. One poster described how terrible Sprint customer support is. Imagine how bad it would get if they knew they had one less (aggressive) competitor.

    Look at wired broadband. In almost all U.S. cities there are only two choices, the cable TV company and the phone company. And plans, pricing and service suck. It would be better if there were four or more choices.
    robajoseph15