As Sprint/T-Mobile merger odds reach 90%, rivals push for conditions

FCC headquarters
The FCC, headquartered in Washington, D.C., is reviewing the Sprint and T-Mobile merger. (Ser Amantio di Nicolao/CC BY-3.0)

Analysts increasingly expect regulators to approve the merger of Sprint and T-Mobile. And that situation may be driving some of the companies’ rivals to push for conditions on the merger that would aid their businesses.

“We are growing more confident (~90%E likelihood) that the merger will be approved by regulatory authorities, but with divestitures that could spawn a new, fourth competitor (cable, DISH?),” wrote the analysts at Oppenheimer in a note to investors this week. (Some hope regulators will require the merged Sprint and T-Mobile to spin off spectrum or even some customers, assets that could be purchased by a cable company or Dish Network.)

Oppenheimer’s 90% figure is higher than the 70% odds issued by the analysts at Wells Fargo just weeks ago. When the merger was first announced, odds among Wall Street analysts ranged from 40% to 80%.

Nonetheless, select critics continue to blast the deal. Indeed, representatives from regional telecom operator C Spire met with FCC officials this week and reiterated the company’s opposition to the merger initially laid out in August.

However, C Spire executives also said that “if for any reason the Commission is inclined to grant the applications [and approve the Sprint/T-Mobile merger], the C Spire Petition seeks alternative relief—the imposition of explicit conditions to protect the ability of competitive carriers to receive fair and reasonable wholesale roaming and MVNO agreements from the merged entity.”

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In a filing with the FCC detailing the company’s meeting with FCC officials, C Spire executives argued that, if the agency approves the transaction, it needs to require the newly combined company to continue to provide roaming and MVNO access on a reasonable basis. The company’s full filing detailing the meeting is available at the end of this article.

Further, the C Spire executives argued the combined Sprint and T-Mobile should be required to maintain Sprint’s CDMA network for five years, not the three years promised by T-Mobile. “C Spire is not asking the Commission to cause New T-Mobile to maintain the Sprint CDMA network indefinitely. Rather, it has picked a reasonable transition period (5 years) that will enable C Spire to complete the ongoing migration of its CDMA-only customers to more advanced technologies according to the reasonable expectations it had based upon business discussions with Sprint,” C Spire wrote.

Select critics have argued against the merger for a variety of reasons ranging from jobs to national security. The transaction must still receive approval from entities including the FCC and the Department of Justice.