One of the pressing concerns about the proposed merger between T-Mobile and Sprint is that it would shrink the market of major US wireless carriers from four down to three. But according to a report from Bloomberg tonight, the Department of Justice might be pushing for a way to prevent that: apparently, the DoJ wants to see T-Mobile and Sprint “lay the groundwork” for an entirely new carrier to emerge as a condition of any potential approval of their merger.
By the sounds of it, this would be a spun off mobile provider with its own network cobbled together from assets and spectrum that currently belong to T-Mobile and Sprint. Bloomberg doesn’t mention how receptive the two carriers are to this idea, nor does it detail how everything would play out. But even conceptually, this solution would seem to go against one of the core arguments that T-Mobile and Sprint have made for their coming together: they say joining forces will create a much larger, more formidable rival to Verizon Wireless and AT&T and drive down prices for consumers.
Having to give away enough spectrum and network resources to create a new national carrier would surely result in a weaker “New T-Mobile” than the two companies had originally hoped for. T-Mobile and Sprint have claimed their merger would lead to an ambitious and comprehensive deployment of 5G technology across the United States over the next several years. Earlier this month, both parties agreed to what they insist are “enforceable” deadlines on 5G expansion, which was enough for FCC chairman Ajit Pai to say he’d vote in favor of the deal. But critics say T-Mobile and Sprint’s promises of blanketing 97 percent of the US with 5G within three years (and covering 99 percent of Americans with it in six years) are meaningless and hard to accurately measure.
Those conditions that T-Mobile and Sprint reached to gain the FCC’s blessing apparently have not been enough to sway the Justice Department’s antitrust chief, Makan Delrahim, according to Bloomberg’s report. He’s still said to be concerned over shrinking the field of competitors, which has led to this idea of, well, just making another carrier so the US will still be left with four if the deal ultimately gets a thumbs up. Bloomberg notes that discussions between the carriers and DoJ have “been productive,” with both T-Mobile CEO John Legere and Sprint CEO Marcelo Claure seen outside the Justice Department on Wednesday.