T-Mobile (TMUS) and Sprint (S) are struggling to get approval from the antitrust division for their merger. The Department of Justice thinks that the potential $26.5 billion merger could harm customers and the competition.
The Department of Justice is concerned that the merger could reduce the number of wireless carriers in the country from four to three. The wireless carriers would include the newly merged company “New T-Mobile,” Verizon, and AT&T. The regulators were also concerned that the new combined entity would raise the prices for US wireless customers.
Condition to make a new network
To clear the merger, the Department of Justice wants T-Mobile and Sprint to consider creating a new wireless carrier with their own network. The new wireless carrier would be the fourth competitor in the wireless space. The companies have already agreed to sell their Boost Mobile prepaid wireless brand to gain approval from the U.S. Federal Communications Commission. Potential bidders expect the brand to sell for up to $3 billion. Amazon has shown interest in buying Boost Mobile.
According to Bloomberg’s report, Comcast (CMCSA) and Charter Communications (CHTR) intend to bid on certain parts of the wireless business in the spectrum as well as favorable wholesale agreements, network equipment, and customers.
Comcast and Charter Communications already provide wireless services. They could acquire the spectrum from T-Mobile and Sprint to become the fourth wireless network. The mobile carriers would give 5G speed to broadband and TV services, which would likely hurt traditional cable service providers. According to research by Statista, 5G subscriptions are projected to reach 2.61 billion by 2025.