It’s no secret that Sprint and T-Mobile have been flirting with the idea of a merger. Aside from what are said to be ongoing discussions between Sprint’s majority owner SoftBank and T-Mobile’s Deutsche Telekom, top executives have reportedly also met with the United States Justice Department.
SoftBank’s Masayoshi Son and Sprint’s Dan Hesse sat down with officials in January to gauge how the DoJ would potentially respond to a move to merge with or acquire T-Mobile. Those with knowledge of the talks say the idea was greeted with skepticism.
US officials favor the current marketplace with four competing carriers. Reducing that number to three via a merger of the third and fourth largest (Sprint and T-Mobile, respectively) would likely face regulatory troubles.
There is no question that Sprint is serious about the possibility, and T-Mobile has not denied interest in seeing a merger come to fruition, but one need only look at AT&T’s attempt to acquire the smaller carrier for precedent. On paper the deal was all but done until government agencies stepped in to squash the merger.
With T-Mobile’s recent gains in customers and aggressive pricing strategies, the DoJ doesn’t want to upset what has amounted to a competitive resurgence in the mobile market place in recent months. T-Mobile and Sprint, however, believe a merger might be the only real way to apply pressure to the likes of AT&T and Verizon.
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