Department of Justice Wants T-Mobile to Create New Competitor as Part of Deal

Apparently, top Justice Department officials want T-Mobile US and Sprint to lay the groundwork for a new wireless carrier -- with its own network -- as a condition to clearing their $26.5 billion merger. But the idea of spinning off a full-fledged national competitor would be a high bar for T-Mobile and Sprint to meet. T-Mobile and Sprint, the two smallest national wireless carriers, have to weigh whether the remedies offered to gain approval are too onerous. The challenge: make enough concessions to assure antitrust enforcers that competition will thrive as the industry shrinks from four rivals to three -- without eliminating the benefits of merging the two companies.

Setting up a fourth competitor is possible, but could be unpalatable to the companies, said Blair Levin, an analyst with New Street Research and a former FCC chief of staff. “It can be done, but the question is whether there’s a solution that would satisfy the companies and the Justice Department and the states,” he said. “That’s hard.”