T-Mobile’s Proposed Sprint Takeover Teeters Toward Collapse as Regulators Show Concerns

WASHINGTON — According to multiple media reports, Department of Justice antitrust lawyers have told T-Mobile and Sprint they are unlikely to approve their proposed $26.5 billion deal. This follows growing skepticism both inside and outside government that any of the companies’ merger claims will benefit the public.

The proposed merger would leave the United States with only three nationwide wireless service providers. As a result, it would reduce competition, raise prices and eliminate as many as 30,000 jobs. In particular, the deal would be harmful to low-income consumers and communities of color who rely on competition between these two providers (and their pre-paid services Boost, Virgin and Metro) to keep access affordable.

Free Press Senior Policy Counsel Carmen Scurato made the following statement:

“We are encouraged by news of the potential demise of this bad deal. T-Mobile and Sprint executives can’t make the case for this deal’s public benefits because there aren’t any. Regulators digging in on the details are rightfully skeptical of the bogus claims made by these companies. No conditions will improve the merger, and it must be rejected.

“A merger between T-Mobile and Sprint would disproportionately harm low-income communities and people of color, who are more likely to be on the wrong side of the digital divide, and more often rely on mobile phones as their only means of connecting to the internet. Sprint and T-Mobile and their prepaid brands are crucial providers of mobile service for low-income people who report yearly incomes of $25,000 or less and can’t afford the price hikes this merger would cause.

“The ongoing competition between these two carriers is a key factor keeping wireless access more affordable for some of the most vulnerable people in the United States. Eliminating choices in the marketplace would never benefit this population, despite T-Mobile’s ridiculous claims that less is actually more.

“Nothing about this merger’s alleged benefits, all of which are speculative and unenforceable, offsets its immediate and permanent harms. And the rejection of this deal would send a loud message to other large media companies contemplating similar mergers: No one is buying your too-good-to-be-true claims about synergies and economies of scale. Such mergers only benefit your companies’ top executives and shareholders, while sticking the rest of the nation with the bill.

“A marketplace with a diversity of competing options helps create more affordable access for more people across the country. The path to universal access in the United States won’t be paved by mega-mergers.”

###