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Sprint to buy T-Mobile US? Not so fast, says antitrust official
Merger would earn 'a very hard look,' Justice man warns
Rumors persist that US mobile carrier Sprint may be looking to snap up smaller rival T-Mobile US, but a top antitrust enforcer has warned that any such deal would be very unlikely to meet regulatory approval.
"It's going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers," William J. Baer, the assistant attorney general for the US Department of Justice's antitrust division, told The New York Times on Thursday.
Talk that Sprint might be readying a bid for T-Mobile has been swirling since December, when the Wall Street Journal reported that Sprint was "studying" whether regulators might approve such a deal.
The last company to try it, second-ranked mobile operator AT&T, lost $4bn in 2011 when the Justice Department quashed its proposed acquisition of T-Mobile, citing antitrust concerns.
Sprint might still be willing to try its luck, though. Although it's the third largest carrier in the US after Verizon and AT&T, it has about half as many subscribers as either, and fourth-place T-Mobile has fewer still.
A merger between Sprint and T-Mobile would create a new third-place carrier that would be closer in size to the top two and might therefore be better equipped to compete with them.
Then again, it might also just draw the ire of the Justice Department once again. Baer told the Times that any such deal within the wireless industry would get "a very hard look" from his antitrust division, and that consumers have enjoyed "much more favorable competitive conditions" since the AT&T/T-Mobile merger was halted.
"We've seen the benefits over the last two and a half years of four-firm competition," Baer said. "Experience teaches us that the market is thriving and consumers are benefiting from the current competitive dynamic." ®