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Reported Sprint And T-Mobile Merger Could Face Roadblock from US Justice Department

January 28, 2014 - Written By Eric Abent

 

We’ve been hearing whispers of a supposed deal for Softbank and Sprint to buyout T-Mobile, and while such a deal might make sense from a business standpoint, the US Justice Department might put an end to any talk of a merger. According to the Wall Street Journal, which spoke to sources close to the potential deal, Softbank’s Masayoshi Son and Sprint’s Dan Hesse recently met with Justice Department officials, and the regulators suggested that they’re skeptical of a merger this big. This isn’t anything new, as the Justice Department decided it wasn’t going to let AT&T purchase T-Mobile a few years back. Softbank’s potential deal with T-Mobile could face the same fate, as the Justice Department seems to think that the current set up of four major carriers is good for consumers. Just as well, the progress T-Mobile has made in the last year is viewed as healthy for competition, and the idea is that when there’s healthy competition, the consumers are ultimately the ones who benefit.

Such a deal would be good for Sprint and T-Mobile, which both come up short in their battle against giants AT&T and Verizon. Apparently, Softbank would argue that a merger would give both carriers a better chance at actually competing, pointing to Verizon and AT&T’s massive subscriber numbers and, by extension, massive profits. It’s a decent argument, but will the Justice Department go for it? It’s absolutely hard to say at this point, but if they didn’t go for AT&T’s buyout proposal, Softbank and T-Mobile parent company Deutsche Telekom probably face an uphill battle convincing antitrust regulators that the merger would be good for competition in the mobile space.

Regardless of the final verdict from the Justice Department, there’s still a long way to go before we hear it. Softbank is apparently willing to offer $31 billion to purchase a majority share in T-Mobile, and a deal with that much money on the line has a ton of finer points to work out. Aside from hammering out the details of such a large-scale merger, it sounds like the Justice Department is going to take a lot of convincing, so plenty of time will have to be devoted to that. There will undoubtedly be more news on the way in the coming days and weeks, so keep it here at Android Headlines for more.

Source: Wall Street Journal (subscription required)|Via: TmoNews