Last we reported on the potential merger between Sprint and T-Mobile, it was reportedly in the final stages, with final details needing to be ironed out. Even if that turns out to be true, a report by Reuters alleges that the merger will not take place before September.
According to “people familiar with the matter,” both companies are currently preparing to present the deal to U.S. regulators, primarily the Federal Communications Commission (FCC) and Department of Justice (DOJ). Currently, T-Mobile and Sprint are trying to bulletproof their arguments in order to fend off scrutiny from regulators.
SoftBank chairman Masayoshi Son argues that the merger between Sprint and T-Mobile would allow both companies the means to properly compete against AT&T and Verizon, the current juggernauts in the U.S. Reuters also notes that SoftBank will likely argue that pending mergers of Comcast and Time Warner Cable, as well as AT&T and DirecTV, will further marginalize Sprint and T-Mobile in that competition will be further shrugged off.
Unfortunately, as has been the case since December of last year, it will be difficult for SoftBank to achieve what it wants. Back in 2011, a merger between AT&T and T-Mobile was rejected, the justification being that the wireless market is too concentrated as it is. For another carrier to go away in a merger would minimize competition.
However, such a thing was done when regulators approved of a merger between US Airways and American Airlines. As such, regulators might be keen to pay attention to the proposal, as it would likely lead to a strong number three.
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