T-Mobile and Sprint are locked in talks over selling spectrum to a smaller rival to win US approval for their $26bn merger, people familiar with the matter said, with just days left before a key regulatory deadline.
T-Mobile is seeking permission from the US Department of Justice for its proposed purchase of its smaller telecoms rival. But DoJ officials are demanding the two companies sell assets to help create a fourth rival in the wireless market before they allow the deal to go ahead, according to people close to the talks.
Sprint is in talks to sell its Boost Mobile brand to Dish Network as part of a package worth around $6bn designed to satisfy the DoJ demands.
But three people close to the talks have told the Financial Times the parties have not been able to agree the specifics of a proposed spectrum sale as part of that deal, despite facing a deadline of Monday for the DoJ to rule on the merger.
The people briefed on developments said the talks are likely to continue into next week, which would mean either closing the deal without approval and fighting a DoJ lawsuit, cancelling it or seeking a further extension from the department.
One person said they expected the DoJ to grant such an extension, but only if officials felt negotiations with Dish were moving in the right direction.
The Federal Communications Commission, the other agency with jurisdiction over the deal, is set to give its approval after its chairman Ajit Pai said he would recommend his fellow commissioners do so.
The DoJ and Dish declined to comment. Sprint and T-Mobile, which is controlled by Deutsche Telekom, did not immediately respond to a request for comment.
One person close to the talks said: “The outlines of a deal are there, but Dish wants more spectrum, while Sprint and T-Mobile are trying to hold on to as much as they can.”
If the deal goes through, it will shake up the US wireless market and create a third major company to compete with AT&T and Verizon. It also has the potential to become a political dispute, as some high-profile Democratic candidates for US president have pledged to be tough on antitrust issues.
Some staff at the DoJ have opposed approving the deal, according to people familiar with the matter. But the final decision will rest with Makan Delrahim, the chief of its antitrust division, who was appointed by US president Donald Trump.
John Legere, the chief executive of T-Mobile US, has been criticised by Democrats in Congress for spending $200,000 staying at the Trump Hotel in Washington while his company sought approval for its Sprint deal.
According to one person briefed on the process, Mr Delrahim is likely to give his approval if he is satisfied that the asset sales are sufficient to empower a fourth competitor, and also if the newly-merged company agrees not to overcharge Dish to use its network once Boost is sold.
After the deal is complete, the person said, Boost will temporarily have to use the T-Mobile network, which would give T-Mobile the opportunity to raise prices and push customers back towards its brand.
But with no agreement reached on the spectrum sale, T-Mobile is unlikely to have approval by the DoJ deadline, or in time for a court hearing on Friday to hear arguments from 10 states that are trying to block the deal.
T-Mobile and Sprint had hoped to agree on their asset sales before that, in the hope that a judge would then require the state attorneys-general to refile their complaints based on the new terms, according to two people close to the deal.
- KKR wins race to buy German payments group for €600m 34 views | posted on August 4, 2019 | under Finance
- WeWork tests tolerance for its ‘gov-lite’ structure 14 views | posted on August 15, 2019 | under Finance
- Venezuela sanctions order leaves Citgo’s future in doubt 13 views | posted on August 12, 2019 | under Finance
- BMO 1st Art! Competition Recognizes Fresh Perspectives from Emerging Canadian Artists 7 views | posted on August 12, 2019 | under Finance
- How JR Builds Simple $4,000 Per Month WordPress Website Business 6 views | posted on July 28, 2019 | under Videos