18 out of 19 state public utility commissions support the deal
T-Mobile (TMUS) and Sprint (S) have secured the backing of the majority of state utility commissions, bringing them a step closer to finalizing their merger deal. On May 30, the Hawaii public utility commission cleared T-Mobile to proceed with its acquisition of Sprint. The approval from Hawaii means that 18 out of 19 state public utility commissions now support the T-Mobile-Sprint merger, according to a Bloomberg report. Among state public commissions, only approval from the California public utility commission is pending.
At the federal level, the FCC (Federal Communications Commission) has shown it will approve T-Mobile’s proposed merger with Sprint. But the antitrust division of the Department of Justice (or DOJ) is reluctant to sign off on the merger deal. The DOJ’s approval is necessary for T-Mobile and Sprint to finalize their merger agreement.
DOJ concerned about reduced competition in America’s wireless market
When AT&T (T) wanted to purchase Time Warner, the DOJ went to court to block the deal, saying it would stifle competition in the American pay-TV market and hurt consumers in the process. The DOJ eventually lost the court battle. As in the case of AT&T and Time Warner, the risk of reducing competition is a major sticking point at the DOJ in the proposed merger of T-Mobile and Sprint. Labor unions and some companies planning to venture into the wireless business are also opposed to the idea of allowing T-Mobile and Sprint to combine. Vocal opposition to the proposed merger has come from Altice USA (ATUS) and Dish Network (DISH). Altice is expected to begin providing mobile phone services in the coming months, which will see it compete with T-Mobile and Sprint for subscribers. Dish is developing a wireless network that it could use to launch a mobile phone service in the future.
T-Mobile finished the first quarter with 81.3 million subscribers, making it the third largest mobile operator in the United States.