Sprint-T-Mobile deal faces tough path through Trump's Washington

A Sprint Corp merger with T-Mobile US Inc was firmly rebuffed by antitrust officials in Washington four years ago. Winning them over this time won’t be easy, even with a new administration in power.

The deal would combine two of the four biggest wireless carriers in the US, setting the stage for an in-depth investigation by the Justice Department into whether the tie-up would harm competition in the industry. In 2014, when the department’s antitrust division last looked at the deal, the answer was: Don’t even try.

“I find it hard, given the history, to see the DOJ not challenge it,” said David Turetsky, a former deputy assistant attorney general with the antitrust division. 

“It’s basically a four to three in the wireless industry. Even if they argue there are 10 players, they are still the top four.”

Sprint and T-Mobile have complementary wireless spectrum that may be a strategic advantage as the companies build a 5G network. T-Mobile controls a large portfolio of lower-band airwaves that can travel long distances and pass through walls and windows. Sprint has the largest US holding of higher-band, 2.5-gigahertz spectrum that can handle more data capacity but over limited distances.

“The companies will argue that only together will they be able to make the requisite investments in 5G, and there’s probably a fair amount of truth to that,” Moffett said.

Sprint is controlled by Tokyo-based SoftBank Group Corp. and T-Mobile is owned by Germany’s Deutsche Telekom AG, which will have the biggest stake in the combined entity.