T-Mo/Sprint Merger Chances Drop As Republicans Fear Embarrassment: Analyst

The likelihood of T-Mobile and Sprint's proposed merger being approved by the Department of Justice is growing slim and one doesn't need to look further than the companies' own recent statements to reach the same conclusion, wrote MoffettNathanson analysts this week.

A straightforward tell

One of the most high-profile industry watchers changed their prediction of the attempted tie-up, downgrading its chances from 50- to 33-percent, pointing to what they deem is a couple of "Hail Maries" on T-Mobile's part. That's how the analysts described T-Mobile's recent commitment to make broadband Internet available in rural America via 4G-based fixed wireless and freeze all service prices for three years if the merger is approved.

The Bellevue, Washington-based network operator made both promises publicly and with no apparent involvement from federal regulators, which MoffettNathanson seems as an extremely discouraging sign for anyone hoping to see the consolidation greenlit.

T-Mobile and Sprint are presently navigating through a late stage of regulatory approvals and antitrust probes, a highly unconventional time for any new grand concessions being introduced, yet the self-proclaimed Un-Carrier resolved to bring two more into the fold in a matter of days. Not straying beyond the Occam's razor principle, the moves were largely triggered by a private regulatory signal suggesting the tie-up's chances of being approved are decreasing.

No one is in the business of avoiding to make the most money legally possible, least so one of the four national carriers in the United States; by making the said two pledges out of the blue, T-Mobile gave a clear signal it knows something the public doesn't - something that's far from ideal for its ambitions to continue growing in an aggressive manner.

The analysts concluded their latest wireless prediction with a rhetorical question: "when was the last time you saw a Hail Mary pass from a team that was ahead?"

High national-embarrassment potential

Recent media reports and insider claims suggest certain state officials are considering suing for the deal to be blocked even if the DOJ gives it the go-ahead. In doing so, they would start a chain of events that would likely result in a public trial which would see them successfully argue their case based on nothing else but the DOJ's own rulebook from 2010.

Adding AT&T's failed attempt to acquire T-Mobile which the DOJ formally opposed in 2011 and the government agency's failed lawsuit against AT&T's purchase of Time Warner from last year, there's plenty of precedents to go around when it comes to putting together a case against T-Mobile and Sprint being allowed to combine, most industry watchers agree.

Due to that state of affairs, the DOJ is likely to reject the merger proposal solely to avoid being dragged into the court of law by some state-level administration or an activist group, the analysts opinioned.

In that scenario, T-Mobile and Sprint would likely sue to attempt forcing the issue but their chances of succeeding would be next to none; the Trump administration and the Republican Senate presently want to avoid any move that would generate bad publicity associated with anti-consumerism and with the DNC's influence in Washington now once again being on the upswing, it's unlikely the political climate in the U.S. will be anywhere close to conducive to big-business tie-ups anytime soon.

Copyright ©2019 Android Headlines. All Rights Reserved
This post may contain affiliate links. See our privacy policy for more information.
You May Like These
More Like This:
About the Author
2018/10/2018-10-23.jpg

Dominik Bosnjak

Head Editor
Dominik started at AndroidHeadlines in 2016 and is the Head Editor of the site today. He’s approaching his first full decade in the media industry, with his background being primarily in technology, gaming, and entertainment. These days, his focus is more on the political side of the tech game, as well as data privacy issues, with him looking at both of those through the prism of Android. Contact him at [email protected]
Android Headlines We Are Hiring Apply Now