Sprint and T-Mobile Merger Troubles

It’s been nearly two years since T-Mobile and Sprint announced that they’d be merging into one corporation. The delays in the merger have been prompted by the lack of regulatory approval from the Justice Department and FCC. This hasn’t stopped the two companies from believing that they’ll acquire regulatory approval, with advertisers beginning to release advertisements that promise new services for customers with both Sprint and T-Mobile. Technically, these actions are illegal and can be considered false advertising.

Another hurdle that’s facing this merger is Victor Marrero, a District Judge in the United States. He believes that Sprint Mobile could recover from their declining profits, similar to how T-Mobile accomplished its regrowth in 2012. However, this carrier was granted a $3 billion loan from the United States Government. Without that loan, T-Mobile would’ve inevitably gone bankrupt. Subsequently, the Justice Department and US Government must provide a similar payout to Sprint Mobile, or the merger must go forward. Without this merger, analysts anticipate that this mobile carrier will become bankrupt in four years.

Sprint Mobiles Future

Testimonies made by individuals working with Sprint Mobile have indicated that without the merger, cellular plans will be increased in valuation, and money will be borrowed from various banks. Increased prices for cellular plans wouldn’t benefit the 50+ million individuals in America that maintain accounts with Sprint. There isn’t any clarifying reason why authorities in the United States are against the merger, other than the potential for less competition in the market. This means T-Mobile would have a more significant monopoly on the market, similar to AT&T.

One of the benefits of this merger is the promises coming from T-Mobile. The corporation guaranteed that is Sprint Mobile was acquired, the cost of plans wouldn’t be altered in any capacity. However, analysts that have reported to the government confirmed that there are loopholes in cellular legislation that would enable T-Mobile to backout from that promise. Another point to consider is that Sprint Mobile already carries a substantial level of debt, with them wanting to avoid gaining anymore going forward.

The final ruling for this merger will come on January 15th, 2020. District Judge Marrero isn’t expected to make a favourable ruling, with most anticipating that the merger will be declined. Unfortunately, this will go directly against the American people and force a dampened market. The capacity for Sprint Mobile to move forward will be exhausted in four years if the ruling goes against their favour, with some believing that this is what Marrero wants.