Sprint's Pursuit of T-Mobile US Faced Grim Prospects from Start

Sprint's pursuit of T-Mobile US faced grim regulatory prospects from the start, a reality the company succumbed to on August 5 when it abandoned its acquisition plans.

Regulators were quick to embrace Sprint's move, which pre-empted what could have been a lengthy legal fight in which the company faced long odds. US enforcers have made clear for several years that they believed that the national wireless market already was highly consolidated and would benefit from keeping four competing national providers in the game: AT&T, Sprint, T-Mobile and Verizon Communications. The Justice Department's 2011 lawsuit challenging AT&T's $39 billion takeover of T-Mobile said the deal would hurt consumers and lead to higher prices. The department portrayed T-Mobile as a price-cutting maverick that offered consumers attractive service options. The Federal Communications Commission also objected to the deal, which AT&T eventually abandoned. Government officials were pleased with competitive strides T-Mobile made since the collapse of the AT&T deal and said so publicly. Behind the scenes, enforcers from the Justice Department and the FCC met with Sprint executives over the winter and made clear they were highly skeptical of a T-Mobile deal. That skepticism never faded.