As Sprint & T-Mobile merge, concerns raised over ‘reduced’ competition on US wireless industry
As two of the United States' top four wireless carriers - Sprint and T-Mobile -- decide to merge, speculation is on that the country's justice department could launch a probe into the tie-up to see whether it would harm competition and hurt the customers' benefit.
The two carriers, who announced their merger in an all-stock transaction, have eventually given shape to a deal which looked ominous even four years ago. In 2014, Washington's anti-trust officials had strongly objected to the idea of the merger, said a Bloomberg report, and this leads to an all the more tough road ahead for the deal.
The Bloomberg report cited David Turetsky, a former deputy assistant attorney general with the justice department's anti-trust division as saying that given the history of the merger, he would be surprised if the justice department did not challenge the deal which will mean the number of players in the wireless industry coming down to three from four.
Both Sprint and T-Mobile have a wireless spectrum that complements each other and could prove to be a strategic asset as they set up a 5G network, the Bloomberg report said.
While T-Mobile controls a large portfolio of lower-band airwaves that can pass through walls and windows and travel a long distance, Sprint has the largest US holding of higher-band spectrum which can handle more data capacity but for short distances, the report said, and this makes their roles complementary.
The report also said that during the Barack Obama era, besides the justice department, the Federal Communications Commission (FCC) also raised concern over the number of carriers going down from four to three. But in the Donald Trump era, the FCC chairman said he was open about the number of major players in the US mobile market, the Bloomberg report further said, adding that it has created a major obstacle for the justice department.