Monday, April 30, 2018

T-Mobile and Sprint to Merge ↦

Jon Brodkin, reporting for Ars Technica:

T-Mobile USA and Sprint today announced an agreement to merge, a deal that would combine the US mobile industry’s third and fourth biggest carriers to create a giant nearly as large as AT&T or Verizon Wireless. The all-stock merger deal would have T-Mobile acquire Sprint for $26 billion worth of stock, according to Reuters.

As also noted in the article, this is not the first time that these two companies have tried to merge. A 2014 attempt was in essence blocked by the Obama administration. And, of course, this is just the latest attempt at consolidation among the US’s four major carriers: AT&T tried to merge with T-Mobile in 2011 but that effort also faced opposition from the Obama administration and eventually collapsed.

The Trump administration, however, is far more accommodating to the whims of large corporations. While it is true that the Trump administration has sued to stop the AT&T/Time Warner merger, the opposition to that particular deal appears to be largely motivated by Trump’s hatred of CNN1. It seems likely to me that this deal will be rubber-stamped by the relevant agencies this time around. Consequently, the cellphone oligopoly will shrink from four members to three.