An ideal number of national wireless carriers in the United States doesn’t exist, Washington’s antitrust chief said Friday. “I don’t think there’s any magical number that I’m smart enough to glean,” remarked Makan Delrahim, head of the Justice Department’s competition unit, while speaking with journalists on Friday, Reuters reports. The 48-year-old industry veteran was specifically asked whether he supports the stance of the former Obama administration that four network operators are necessary for maintaining a competitive state of the wireless industry in the country, an argument the federal government laid out in 2011 when AT&T unsuccessfully attempted acquiring T-Mobile. The questions were asked in reference to T-Mobile and Sprint’s proposed merger valued at $26.5 billion.
Mr. Delrahim suggested the DOJ will provide the third- and fourth-largest mobile service provider in the country with an opportunity to prove their case, with the backbone of the proposed consolidation being the fifth generation of mobile networks. According to the two network operators, their 5G deployment efforts would push their competitors to do more on the wireless upgrade front and ultimately benefit the country as a whole, ensuring timelier and more cost-effective 5G buildouts than what either party would manage on its own. T-Mobile and Sprint are essentially arguing their combined operations would be greater than the sum of their parts, though not all industry watchers agree with that claim.
The proposed tie-up is also criticized from the perspective of the prepaid market, the one that’s predominantly servicing the youngest and most credit-challenged Americans; Boost Mobile founder Peter Adderton and NWIDA President Alan Wolf publicly spoke out against the merger several days back, arguing that the move will cause “widespread devastation” and effectively monopolize the prepaid segment, resulting in higher prices, lower-quality service, and other negative effects on America’s poorest consumers. Sprint and T-Mobile are currently aiming to have their consolidation approved within the next thirteen months, though most industry watchers believe it’s still too early to attach any specific approval timeline to the horizontal union they proposed.