U.S. Wants T-Mobile to Create New Competitor as Part of Deal

U.S. Wants T-Mobile to Create New Competitor as Part of Deal
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Top Justice Department officials want T-Mobile US and Sprint to lay the groundwork for a new wireless carrier with its own network, according to Bloomberg, citing a person familiar with matter.

The two companies have been pondering additional concessions that could help win Justice Department approval for their deal, according to people with knowledge of the discussions, who asked not to be identified. But the idea of spinning off a full-fledged national competitor would be a high bar for T-Mobile and Sprint to meet.

From the start, the biggest concern surrounding the T-Mobile/Sprint merger was it would reduce the number of national carriers from four to three, hindering competition. But the companies have argued that their deal would create a stronger No. 3 to market leaders Verizon and AT&T. So far, Justice Department antitrust chief Makan Delrahim hasn’t yet been persuaded by that position and still wants four carriers.

The companies are under pressure to win Delrahim’s approval after securing support from the head of the Federal Communications Commission. A package of concessions endorsed by the FCC failed to persuade the Justice Department’s antitrust division to approve the transaction.

Still, discussions have been productive and the Justice Department hasn’t reached a final decision, one of the people said. T-Mobile CEO John Legere and Sprint Executive Chairman Marcelo Claure, who met with top antitrust officials last week, were seen outside the Justice Department’s headquarters in Washington.