EXCLUSIVE: Sprint's "failing" economy factor in T-Mobile's $ 26B bond
The Registrar's Registrar told FOX Business on Tuesday that a key factor in determining the fate of the proposed Sprint-T-Mobile merger is Sprins increasingly uncertain financial position, which some analysts may not survive without the deal.
The $ 26 billion deal is in regulatory limbo as officials of the antitrust division, if the transaction will lead to price increases since it will reduce the number of large wireless operators. The Federal Communications Commission must also consider the merger, but the main obstacle to the agreement is DOJ, which conducts a detailed investigation into whether such agreements are damaging to consumers.
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Antitrust chief Makan Delrahim, at the Milken Institute conference, told FOX Business solely that company officials have notified DOJ that without the agreement Sprint's future is clearly in doubt and that there are issues about the company will be strong enough to compete effectively with other major wireless players such as AT & T, Verizon and its proposed merger partner T-Mobile.
They also emphasized that by combining with T-Mobile, Sprint's future will be safe. Without the merger, the market could still be dominated by three major players given Sprint's weak financial position.
Delrahim referred to it as "failing company defense".
| Ticker | Security | Change | % Chg TMUS | T-MOBILE US INC | 73.23 [1[ads1]9659014] -0.37 | -0.27 50% |
|---|---|---|---|---|---|---|
| S | SPRINT CORP. | 5.61 | +0.07 | + 1.26% |
The failing corporate defense is "a factor we consider, Sa Delrahim to FOX Business." Whether it meets the legal standards we must consider, is another story. "
Delrahim confirmed FOX Business that Sprint and T-Mobile officials" have discussed "Sprint's ability to survive in the increasingly competitive wireless market, especially as wireless operators are seeking to develop super-fast 5-G technology that can add millions of jobs and hundreds of billions to the US economy.
When asked how high up DOJ's merger rating list relates to Sprint's financial condition, Delrahim said: "Well, that's probably part of the review."
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Press releases from Sprint and T-Mobile had no immediate comment.
Sprint is considered to be the weakest of the four largest wireless carriers. In a recent branch drawing, the company described its financial position in this way: "Sprint is not on a sustainable competitive path."
