Justice Department Poised to Block Potential Sprint-T-Mobile Merger

By Kimberly Koerth

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Sprint executives are reportedly getting some flack from regulators who are concerned about the carrier’s potential acquisition of T-Mobile USA.

While no offer has been made, Sprint majority owner SoftBank is said to be in direct talks about a merger with T-Mo parent Deutsche Telekom. At a recent meeting, antitrust concerns reared their ugly head, a source told Bloomberg.

Sprint believes a merger with T-Mobile would increase competition among a combined Sprint-T-Mo, AT&T and Verizon Wireless. But regulators have historically been happy with the “Big Four” system, knocking down a proposed AT&T-T-Mobile proposal two years ago. The difference here is that Sprint is the nation’s third-largest operator, while AT&T is the second-largest. But maybe that isn’t enough of a distinction.

In some respects, Sprint and T-Mobile are heading in opposite directions. T-Mobile has been adding large numbers of new subscribers who are enticed by its new “uncarrier” policy that allows you to avoid two-year postpaid contracts. Sprint has struggled to keep its subscribers from jumping ship to one of the other big four.

But Sprint has a lot of cash. SoftBank of Japan bought 70 percent of the Overland Park, Kan.-based operator for more than $20 billion. Then it gobbled up Clearwire, the spectrum-rich broadband provider based in Washington state. No one will be surprised when Sprint makes an official move to stand head and shoulders aside its larger rivals.

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