One Wall Street research firm believes that the odds for the merger between T-Mobile and Sprint are beginning to increase. Making it more likely that it will go through. The two companies were up on Capital Hill on Wednesday, testifying before Congress about the proposed merger. This research firm spoke with some people in Washington DC (names were not disclosed of course) and became more optimistic that the deal will go through. This is likely due to how John Legere and Marcelo Claure answered the questions that Congress asked. Also, the recent AT&T and Time Warner merger going through is definitely weighing in here.
While the likeliness of this deal going through is starting to increase, the two companies are starting to have to answer more questions about how the deal would affect prepaid. Between Sprint and T-Mobile, they have the biggest prepaid carriers under their umbrella – MetroPCS, Boost Mobile and Virgin Mobile. And it's currently unclear what would happen with those brands, whether they would be rolled into one brand, or gotten rid of altogether. The Wall Street Journal recently reported that the New York Attorney General is investigating the effects that this merger could have on the prepaid market. It also reported that dozens of other State attorney's general are also looking into the matter.
The merger between Sprint and T-Mobile is going to be put under quite a bit of scrutiny by regulators and Congress, which is not a surprise to anyone – including Sprint and T-Mobile. But both companies are still expecting the deal to be approved and close within a year. The argument for combining Sprint and T-Mobile is to be able to better compete with AT&T and Verizon in the 5G space. Seeing as AT&T and Verizon are both about twice the size of Sprint and T-Mobile, combining the companies would take the US from having two big carriers and two smaller carriers, to having three big carriers that can compete better with each other. Which is going to be good for the consumer.