Shifts in Wireless Market May Sway a Sprint Deal

In the view of Sprint and T-Mobile USA, less is more. A merger of the two companies -- the No. 3 and No. 4 wireless carriers in the country -- would not reduce the number of competitors in the wireless phone market, the deal’s supporters say. Rather, it would add a competitor to a market now dominated by AT&T and Verizon. That argument will almost surely get a stiff test in the coming months, as Sprint and T-Mobile USA have reportedly settled on the terms of a $32 billion deal that is likely to be unveiled this summer.

The deal, if made, would reach the desk of skeptical antitrust regulators. The regulators’ concerns have, in part, delayed talks between the two companies in the last couple of years. With two regulators steadfastly opposed to a deal, what might possess a company to try — especially since Sprint is said to be willing to pay T-Mobile $1 billion if a deal is stopped? One answer, Sprint backers say, is that it must reach a deal now to compete with AT&T and Verizon. But another answer, antitrust experts say, could be that the communications world is different than it was just four months ago, and different enough that regulators will change their minds. The cellular market now bears little resemblance to the market of 2011, when the Justice Department squashed AT&T’s dreams of buying T-Mobile’s wireless business in the United States, saying the reduction in competition would be damaging.