US scrutiny tests T-mobile’s bet on Sprint

NEW YORK: T-mobile US Inc’s $26 billion deal to buy Sprint Inc banked on changes in wireless technology and media streaming to win US antitrust approval, but the bet now looks precarious.

Growing scepticism from the US Department of Justice’s antitrust staff over the impact of the merger on competition in the market will test the resolve of the companies to complete the deal that would see the top US wireless carriers shrink to three from four.

While the Department of Justice has yet to reach a decision on whether to approve the deal, it is pushing Sprint and T-mobile for evidence that the merger would be in the interest of US consumers, people familiar with the matter said this week.

The deal would be the third major attempt in less than a decade to consolidate the US wireless market, after AT&T Inc’s $39 billion deal to buy T-mobile in 2011 was blocked, and Sprint and T-mobile abandoned a previous attempt to negotiate a merger in 2014 following regulatory opposition.

If completed, the deal would create a carrier with 127 million customers that will be a more formidable competitor to the No1 and No 2 wireless players, Verizon Communications Inc and AT&T, respectively.

Sprint shares are down more than 6 per cent after the Wall Street Journal reported the merger is unlikely to be approved as currently structured, despite T-mobile CEO John Legere tweeting that the premise of the story was “simply untrue”. — Reuters