T-Mobile, Sprint merger may not clear the Justice Department: WSJ

The merger of the No. 3 and No. 4 wireless companies, T-Mobile and Sprint, could be in jeopardy of falling through. 

According to the Wall Street Journal, quoting unnamed sources, lawyers for the Justice Department told the companies it was unlikely their $26 billion merger would be approved.

Verizon is the No. 1 wireless carrier, with a 34.4% market share, followed closely by AT&T at 33%, 17.9% for T-Mobile and 13.5% for Sprint, according to a recent study by Georgetown University. 

The final word on a merger rests with agency leadership, not staff, so Sprint and T-Mobile could see their combined company happen, but a staff recommendation against it isn’t a positive sign. 

T-Mobile and Sprint had tried before to merge, but the deal fell apart. T-Mobile also looked to join forces with AT&T, but the Obama administration blocked that one. 

On Twitter, T-Mobile CEO John Legere dismissed the Wall Street Journal report as speculation, calling the “premise….simply untrue,” and said the company would have no further comment. 

In announcing the deal to merge, T-Mobile and Sprint said the move would make the companies more competitive and enable them to invest in the next generation of technologies, super-fast 5G service. 

In a filing to the Federal Communications Commission this week, Sprint said it badly needed the merger to remain competitive. 

“Sprint is in a very difficult situation that is only getting worse. Sprint’s network lacks the coverage and consistency that customers demand….Sprint is losing customers—which then reduces revenues and cash flow—further limiting its ability to invest in its network and service its debt. Simply put, Sprint is not on a sustainable competitive path.”

We reached to Sprint for comment, but didn’t hear back. 

Follow Jefferson Graham on Twitter: @jeffersongraham

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