A STRONG SIGNAL
Feds said to back pro-Sprint/T-Mobile 5G stance
US regulators believe there needs to be three national 5G wireless providers to ensure robust competition, The Post has learned — a position that provides a big boost to the proposed $26.5 billion merger of Sprint and T-Mobile.
The No. 3 and No. 4 wireless carriers have said they don’t have the finances independently to quickly bankroll an expensive rollout of the next generation in wireless technology — leaving just Verizon and AT&T to offer a 5G network.
After studying the Sprint-TMobile proposal for more than three months, the Department of Justice, while not yet making a decision on the merger, now believes there needs to be three carriers to establish a true competitive marketplace, according to a source with direct knowledge of the thinking within the DOJ.
“If without the combination only AT&T and Verizon can offer 5G they are concerned,” one source said.
T-Mobile has said since it announced the deal with T-Mobile in April that the companies need to combine so they can quickly develop a national 5G wireless network.
“I think [the feds’ position] is a big positive for the merging parties,” a Beltway antitrust professional not involved in the wireless deal said.
Both the Department of Justice and the Federal Communications Commission are reviewing the proposed merger, although clearance from Justice is usually a the tougher hurdle to clear.
“A merger would enable both companies to build a 5G network faster and possibly earlier than the dominant operators,” said Walter Piecyk, a managing director at research firm BTIG. “T-Mobile doesn’t have the spectrum it needs [now] for 5G but neither does Verizon.”
The price of Sprint and T- Mobile shares indicate investors believe the deal has a 50-50 chance of getting OK’d.
Regulators in recent years have hung up wireless mergers. For example, AT&T in 2014 failed to get approval to buy T-Mobile after President Obama’s antitrust cops concluded there needed to be four such carriers.
President Trump’s DOJ is less concerned with the number of national carriers, its antitrust chief Makan Delrahim said in a recent public forum — and his views have not changed, sources said.
The feds recently issued both Sprint and T-Mobile a second request for information. A staff recommendation is expected as soon as October, sources said.
New Sprint boss Michel Combes on an Aug. 1 conference call said the post-merger company would put “America First” by building out a 5G network that benefits rural areas.
Washington’s Committee on Foreign Investment in the US, or CFIUS, in March stopped Broadcom from buying Qualcomm in large part because it did not want a foreign-influenced company making key chips for 5G technology, showing the government’s strong interest in America’s 5G capability, the source said.
5G wireless technology is expected to have the speeds necessary to power drones and self-driving cars.
Last week T-Mobile signed a $3.5 billion deal with Nokia to build a 5G network, and it is participating in an upcoming US wireless auction.
Sprint has plenty of spectrum but is deep in debt and shown reluctance to fully build its network.
A DOJ spokesman declined comment.