T-Mobile-Sprint deal getting new scrutiny
When T-Mobile announced its intention to buy Sprint in April, the prospects for the $26 billion deal’s winning regulatory approval appeared strong. Although a similar deal had been effectively blocked a few years earlier, Trump administration officials voiced far less concern.
But the merger has faced harsher scrutiny in recent weeks, as Democratic lawmakers, empowered by their House majority, have amplified their criticism of the deal.
The Democrats, as well as consumer advocates, say that combining the two companies would most likely lead to higher prices and job cuts. The deal would reshape the wireless industry, combining the country’s third- and fourth-largest wireless providers, with over 100 million subscribers, just as a new generation of cellular technology comes to market.
The lawmakers have also raised concerns about the companies’ lobbying blitz over the last 10 months, focusing on dozens of stays by executives at the Trump International Hotel in Washington. Some lawmakers have suggested that the companies were trying to buy favor with the Trump administration.
The lawmakers’ criticisms will take center stage at two congressional hearings this week, when John Legere, T-Mobile’s chief executive, and Marcelo Claure, Sprint’s executive chairman, are expected to face tough questioning.
The hearings today before the House Committee on Energy and Commerce, and on Thursday before the House Committee on the Judiciary, will not have a direct influence on the government’s regulatory review. Approval for telecommunications mergers comes from the Justice Department and the Federal Communications Commission, which are close to completing their own independent investigations of the deal.
Legere said last week during a call with investors that he believed the deal was still on track, and that he expected it to be completed by June.
A congressional hearing so late in the review process can add pressure on the agencies or uncover information that extends investigations. Aiming to allay concerns by lawmakers and regulators, the companies promised last week that they would not raise prices for at least three years after the merger was complete.