Several Democrat senators, and the independent Bernie Sanders, have urged US regulators not to approve the proposed $26 billion merger of rival operators T-Mobile and Sprint.
The two companies are the country’s third and fourth largest operators, with a combined customer base of more than 100 million. Given America’s four largest networks control 98 per cent of the market, the senators fear the reduction to three players will increase prices, harm competition and disincentivise investment.
Their fears are echoed by consumer groups and trade unions, who also fear a negative impact on workers’ rights.
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T-Mobile Sprint
The proposed merger of O2 and Three in the UK was blocked because of competition fears, with antitrust bodies citing the example of increased prices in markets where the number of operators had decreased from four to three.
Sprint and T-Mobile held merger talks more than five years ago, but these collapsed due to competition concerns from the Obama administration. However, the Trump administration is believed to be more receptive.
The two bodies that could approved the deal, the US Justice Department and the Federal Communications Commission (FCC), are conducting their own investigations into the deal, and the group of senators have expressed their concerns to both.
The New York Times suggest there is growing speculation the deal is in doubt. There are two congressional hearings on the subject this week, and Sprint and T-Mobile have pledged not to increase prices for three years after the merger is completed in a bid to get the deal over the line.
But Sprint and T-Mobile’s main argument is 5G. They argue that neither operator has the means to build a national 5G network alone, but the combination of their assets means they could do this more rapidly than anyone else. This is because T-Mobile has long range 600MHz airwaves, whereas its rivals only have mmWave spectrum which offers vast capacity but only within a limited radius.
This could appeal to President Trump, who wants the US to be a leader in the field of next-generation networks. Trump blocked the takeover of Qualcomm by Broadcom last year because of fears it would hand Huawei, and therefore China, in the 5G race.
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