As U.S. regulatory agencies continue to consider potential impacts of the proposed $26 billion merger between Sprint and T-Mobile, DOJ antitrust head Makan Delrahim told CNBC he is remains undecided on whether the deal should be approved or not.
“I have not made up my mind,” Delrahim said about his stance on the subject during an interview Monday with CNBC. “The investigation continues. We’ve requested some data from the companies that will be forthcoming.”
T-Mobile executives reiterated confidence during the operator’s quarterly earnings call last week that regulators will greenlight the merger during the first half of this year. Earlier this month, the Wall Street Journal reported that DOJ staff had concerns over the deal as currently structured.
T-Mobile CEO John Legere Tweeted a response to the WSJ article, saying “The premise of this story, as summarized in the first paragraph, is simply untrue.”
Some analysts also have expressed doubt that the merger will happen, including firm MoffettNathanson. In note to investors last week, Craig Moffett wrote the firm is “not optimistic” when it comes to odds of securing deal approval.
MoffettNathanson analysts pointed to the difficulty in finding any structural deal changes that would be workable or satisfactory to regulators, including options like divesting spectrum or selling of prepaid brands.
The T-Mobile-Sprint deal is also under review by the FCC, and currently on day 147 of the agency’s informal 180-day shot-clock schedule. In addition, state attorney generals are reviewing the deal, and the California PUC has yet to sign off.
T-Mobile and Sprint have argued that the combination of the nation’s third- and fourth-largest wireless carriers will be good for consumers and competition, while deal critics have warned of price hikes and job cuts.
If approved, T-Mobile and Sprint pledged not to raise prices for three years, and also committed to building five new customer experience centers that would create up to 5,600 jobs by 2021.
T-Mobile is currently piloting fixed wireless 4G home broadband services, with plans to expand home broadband services to more Americans, particularly in rural areas, if the Sprint deal goes through.
The pair have also argued that the merger is needed for Sprint and T-Mobile to better deliver 5G services and effectively compete against rivals AT&T and Verizon in creating a true nationwide 5G network.
Speaking to CNBC, Delrahim said that 5G does factor into the DOJ’s consideration, in particular when efficiency arguments come into play that are good for the consumer — though he noted there are strict guidelines.
The efficiencies must be merger-specific, where you couldn’t otherwise get those benefits without the deal, Delrahim explained.
“They also need to be verifiable,” he noted. “They can’t be pies in the sky.”
Filed Under: Contracts
