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The FCC said that it would give its blessing to the T-Mobile/Sprint merger deal earlier today. However, the Department of Justice is not giving its blessing, yet.
T-Mobile revised its merger plan recently, which included selling off Boost Mobile after the merger was finalized. Which actually made a lot of sense, even without thinking about the antitrust issues. Seeing as there was already Metro by T-Mobile and Virgin Mobile included in this deal. But the Justice Department doesn’t believe that’s enough to for approval.
While T-Mobile and Sprint did have to meet some conditions from the FCC to get their approval, the Justice Department doesn’t believe those conditions are enough to avoid the antitrust issues that it sees with this merger. And it is planning to block the merger at this point.
To get the FCC’s blessing, T-Mobile agreed to an accelerated 5G build out in the US. This was particularly necessary in rural areas, that is typically forgotten by carriers, as there aren’t as many customers in that area. However, that won’t be an issue with 5G, as it can cover more area, without the need for more towers. It also agreed to sell Boost Mobile. This was enough to get the FCC to approve the merger this morning. But it looks like hours after it got good news, T-Mobile is getting a major blow, in this merger.
It’s not quite official yet, that the Justice Department is going to be blocking the merger, but it definitely looks like it’s going to happen. Unless T-Mobile is able to make some more concessions and changes to its merger plan, to get the approval from the DOJ. Which is still possible, as the Justice Department is not filing a lawsuit to block it just yet.
A lawsuit to block this merger doesn’t necessarily mean that the merger won’t get approved and be finalized at some point. All we need to do is look back at AT&T and Time Warner’s merger just last year. The Justice Department sued to block that merger, but the Judge ultimately sided with AT&T and approved of the merger. Though that was more of a vertical merger whereas this merger with T-Mobile and Sprint is a horizontal one. Basically, two companies that offer the same services, or competitors.
T-Mobile was expecting this merger to be a done deal in the first half of 2019. At this point, it doesn’t look like that is going to happen. It’s halfway there to the approval it needs to go through with this merger. But the Justice Department is going to be a much harder sell than the FCC. The FCC is mostly looking out to make sure that there is still competition in the mobile space, and wanting T-Mobile to accelerate its 5G network. Whereas the DOJ is looking into the antitrust issues with this merger, and there is definitely a good number of antitrust issues with this merger, unfortunately.
The Justice Department may not announce that is blocking this merger for some time, it may still be negotiating with T-Mobile, Sprint, Deutsche Telekom and SoftBank to get it approved. So we’ll have to wait and see what happens.