Sprint, T-Mobile Merger Looks More Likely As DOJ Calls For Just 3 Leading 5G Carriers

The prospects for a Sprint Corp S-T-Mobile Us Inc TMUS merger just got a little bit better.

What Happened

The U.S. Department of Justice is of the mind that just three national 5G wireless providers are needed for sufficient competition, according to a report by the New York Post.

Why It’s Important

Sprint and T-Mobile, which rank No. 3 and No. 4 among wireless providers, claimed in June that quick rollout of 5G wireless is beyond their independent capacities. Their $26.5-billion merger, they said, would better position them to compete in the 5G market through a $40 billion investment in requisite technology.

"To be blunt, we lack the resources to challenge the two dominant players,” Sprint CEO Marcelo Claure said in a separate testimony.

Verizon Communications Inc. VZ and AT&T Inc. T have already committed to developing 5G networks, giving the U.S. just two major competitors on the global scene. That third spot reportedly desired by regulators could be filled by the combined Sprint-T-Mobile entity.

“If without the combination only AT&T and Verizon can offer 5G, they are concerned,” the New York Post’s source said.

What’s Next

U.S. officials must still approve the transaction, which the parties aim to complete in the first half of 2019.

Sprint shares popped 10 percent and T-Mobile 5.6 percent on Monday’s report.

Related Links:

Wells Fargo: T-Mobile Is A Buy With Or Without Sprint

What Would A T-Mobile-Sprint, All-Stock Merger Look Like, And Is It Likely?

Photo credit: Mike Mozart, Flickr