T-Mobile-Sprint Merger Decision Could Drag On Into Summer

Yet another regulatory hurdle looms for Sprint and T-Mobile‘s $26.5 billion merger.

The merger must clear regulatory approval from the California Public Utilities Commission (CPUC), the Wall Street Journal reports. The companies filed their merger with the CPUC in July 2018, but the organization continues to mull over its decision.

Every other public utilities commission has approved the deal, according to Krouse.

“An extension of the statutory deadline until July 12, 2020, is necessary to allow enough time to issue a proposed decision for public review and comments, and to allow the Commission enough time to deliberate and issue its final decision,” the agency wrote in an order extending the decision deadline.

T-Mobile and Sprint are already awaiting a federal judge’s verdict on a lawsuit that multiple state attorneys general launched last year. Allen Friedman of PhoneArena.com writes that although the companies may know the verdict of the case as soon as next month, the CPUC may choose to delay its decision past July.

The agency hosted three forums for public comment on the merger in January.

A Dec. 12 CPUC evidentiary hearing transcript shows T-Mobile and Sprint executives answering questions about how the merger will impact Californian customers — and particularly those of low income. Cross-examiners asked if MetroPCS and Boost Mobile – which are respective subsidiaries of T-Mobile and Sprint – started cutting down on retail locations following the merger announcement. Other documented concerns included include compatibility between Sprint handsets and the T-Mobile network, as well as workforce reduction in retail stores.

“Our intention, first of all, is to provide on our direct stores job offers to ever single employee of both T-Mobile and Sprint to carry forward. And the reason for that is that this merger doesn’t do anything to decrease the amount of labor that we need when it comes to retail,” T-Mobile president and chief operating officer Mike Sievert said during the Dec. 12 hearing. “In fact, the amount of labor that we need is a function of how many customers we have and how much store traffic we have and whether those customers come to our store and whether they want upgrades. Those things will go up because the merger expects us to have more customers than the sum of the standalone companies.”

The U.S. Department of Justice approved the merger last summer under the conditions that Dish Network be allowed to buy $5 billion worth of assets and network access from the two companies. The agreement would ensure that a fourth major wireless carrier exists in the U.S.

Sprint said in its latest financial posting said it lost 3 cents per share during the third quarter — which equates to a $120 million loss. The Street reports that the carrier’s revenue dropped 6%, to $8.08 billion. The loss of 115,000 mobile phone subscribers actually exceeded analyst expectations, according to The Street.