FCC Chair Doubts a Sprint/T-Mobile Deal Will be Approved

February 4, 2014 - Written By Ray Greer

In the US we have four top carriers, always battling it out to gain customers, and make money. When they aren’t competing against each other, it seems as though they like to try to buy one another. We saw AT&T try to buy T-Mobile USA, and now we are seeing Sprint try to buy T-Mobile USA. However, as we have suspected in the past, the one thing standing in the way of the deal, is going to be the US Government. Now Tom Wheeler, who is the Chairman of the Federal Communications Commission, agrees with those suspicions.

Early on in February 2014, Wheeler had a meeting with the Chairman of Sprint, Masayoshi Son, where wheeler voiced his doubts. In an attempt to keep this clean, we will only refer to the two companies as they’re well-known names, Sprint and T-Mobile. Though, if you are deep in the know, Sprint was acquired by SoftBank Corp, and T-Mobile is operated by Deutsche Telekom. Now, it is not unheard of for a company to be acquired by another, we see it many times, like everything going on with Motorola, however, the markets are a bit different.

We have, in the US, four major carriers, Verizon, AT&T, Sprint and T-Mobile. Those four carriers are very competitive, and there are smaller companies, they just aren’t as popular. So, the competition basically relies on those four carriers competing against one another. If they don’t, well than we may not see things like AT&T’s new family plans, or T-Mobile paying ETFs. These are the reasons behind Wheeler’s doubt in the finalization of a merger between two of the US carriers, the hit competition may take.

Wheeler has been a big supporter of competition in the US markets, so it’s no surprise that he would be doubtful. According to sources close to the matter, Wheeler essentially repeated ideas that were heard by William Baer, who is an antitrust chief.

Sprint still tries to fight the good fight though, saying that the US market is suffering anyway. Their reason behind that suffering, according to another person close to the situation, is that the top two carriers competition make it difficult for the bottom two to compete. The whole in that theory are the reports T-Mobile made for the fourth quarter of 2013.

There hasn’t been an official statement on the matter from Sprint, SoftBank, the FCC or anyone for that matter. So we are fully relying on the grapevine for this information, however, that makes it no less exciting. What would happen to the market if this deal went through? would it really affect us, the consumers in a negative way? Or is this something we should want to see go through? Let us know your thoughts down below.

Source: Reuters