Thursday, January 30, 2014

US carrier mergers would face tough time getting DOJ approval

T-Mobile CEO John Legere.
T-Mobile CEO John Legere.
(Credit: Lori Grunin/AFFY)
US wireless carriers who have the urge to merge will meet resistance in the form of the Justice Department.
In an interview with The New York Times published Thursday, William Baer, assistant attorney general for the antitrust division, said that any merger proposals on the part of the major US carriers would encounter intense scrutiny. Baer cited "much more favorable competitive conditions" in the mobile landscape since the DOJ filed a lawsuit to block the merger between AT&T and T-Mobile in 2011. AT&T eventually withdrew its offer.
"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," Baer told the Times. "Any proposed transaction would get a very hard look from the antitrust division."
Since 2011, T-Mobile has developed into a more competitive carrier, providing the DOJ with more ammunition against further consolidation in the mobile industry. That ammunition could be used in any attempted merger between Sprint and T-Mobile.
Masayoshi Son, CEO of Sprint parent SoftBank, and Sprint CEO Dan Hesse recently met with the DOJ to get the agency's take on a prospective merger, according to The Wall Street Journal. The two CEOs were reportedly met with skepticism.
Due to speak at a meeting of the New York State Bar Association Thursday night, Baer is expected to say that merger proposals essentially pay lip service when addressing antitrust concerns. Instead, Baer will likely explain that such proposals are often just a way to get rid of a larger market rival, the Times added.

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