T-Mobile and Sprint are reportedly preparing to ask U.S. regulators to authorize their merger without shedding any assets beforehand.
Reuters, citing sources familiar with the matter, reports that the third- and fourth-largest carriers in the U.S., respectively, hope to keep their spectrum holdings and potential cost savings in tact before telecom and antitrust officials seek concessions during the approval process.
Their proposed merger, which is likely to be announced in coming weeks, would see the U.S. wireless market drop from four major carriers to three if approved. Critics argue that could stifle competition and affect prices — particularly for low-income customers — and reports suggested that antitrust staff at the Department of Justice were unlikely to endorse the plan.
The companies, however, plan to pitch the deal as good for customers due to the investment needed to upgrade to next-generation 5G wireless networks, the sources told Reuters.
The report added that T-Mobile and Sprint are working on a post-announcement strategy to divest some holdings, including spectrum licenses. One analyst predicted that because a combined company would hold more spectrum above 300 MHz than either Verizon or AT&T, the FCC would force the merged company to divest some spectrum.
The companies reportedly have not introduced a breakup fee or a cap on potential divestitures into their talks, but they could be added later.
Although most mergers do not include asset sales at the time of their announcement, some recent telecom deals — including the ill-fated Comcast-Time Warner tie-up and this year’s bid by Sinclair Broadcast Group for Tribune Media — signaled a willingness to sell off some holdings, Reuters noted.
