The fact that T-Mobile and Sprint’s merger is in danger isn’t new but speculation about its chances has now largely been replaced with guesstimates concerning its exact end.
A credible report from Monday saw several sources claim the antitrust unit of the Department of Justice has no intention of letting the deal go on in its current state and may not even be particularly interested in any concessions T-Mobile and Sprint, i.e. their parents and shareholders would deem reasonable. Even as T-Mobile Chief Executive Officer John Legere mustered to deny being informed of such a turn of events by the DOJ, with The Wall Street Journal writing the opposite, the industry veteran was for once left without a witty remark or a crude reaction to something that doesn’t benefit him or his company.
Former Sprint CEO Marcelo Claure already secured his future irrespective of the proposed deal but likely to the progress made in the company’s negotiations with T-Mobile which ultimately led the two to announce a preliminary merger agreement a year ago. Mr. Claure followed in Mr. Legere’s footsteps and dismissed the aforementioned report as frivolous, also without elaborating on the matter in any meaningful way.
Looking at this week as a whole, Sprint’s share prices have once again started flirting with the gutter and while T-Mobile dropped as well its valuation still did close to twice as good as handling the unfavorable reality of the previously proposed merger being on its way to collapsing. At the same time, Sprint’s drop that at one point surpassed six-percent is being widely interpreted as even more evidence the Overland Park, Kansas-based wireless carrier simply cannot survive without a major tie-up in the long term. Not like any additional proof was needed – Sprint said so itself just several days back.
The Dish theory is hence a curious take on the current situation that’s far from unfounded. The cable juggernaut rose by four percentage points just based on the speculation it might end up being a suitable suitor and savior Sprint so desires. A Dish-Sprint merger doesn’t raise any blatantly obvious red flags on the antitrust front, even though consumers should hardly be thrilled with the overall concept of big businesses getting bigger; the larger corporations get, the closer you are to being perceived as simply a statistic to be manipulated.
Both Sprint and T-Mobile insist they’re still in negotiations with the DOJ over their consolidation attempt but given the number of promises the self-proclaimed Un-Carrier made in recent weeks, it appears those talks haven’t been going well.
Cutting the number of major wireless carriers in the U.S. is a move that’s been protested by many consumer rights activists and other organizations in recent months, including Communications Workers of America, the industry’s largest stateside union. Coupled with the fact the Republican party lost the House following November mid-terms, not to mention that its government is now also facing unprecedented scrutiny over a number of serious allegations of corruption, it appears the DOJ isn’t particularly keen on making another anti-consumer move regardless of how vehement T-Mobile and Sprint are in their claims that their merger would be the best thing ever.