Sprint and T-Mobile Get Another Step Closer to Merger Approval in the United States

It looks like the long-discussed merger of Sprint and T-Mobile is taking another step closer to fruition.  The third and fourth largest mobile providers in the United States, respectively, received approval for the merger from the Committee on Foreign Investment in the United States (CFIUS).  This is a government panel in charge of vetting business deals that involve foreign investors.

To help move things along, the United States Department of Justice, Department of Homeland Security, and Department of Defense have all withdrawn earlier requests to delay the merger.

It should be noted that CFIUS has an obligation to review details for a deal like this because T-Mobile’s majority owner is the German-based Deutsche Telekom and Sprint’s parent company is the Japan-based SoftBank.

That in mind, a recent report indicates that approving this deal was, at one time, at least partially contingent upon both of these foreign parent companies reduce their use of Huawei devices. Apparently, this is no longer a relevant restriction as these parent companies—SoftBank nor Deutsche Telekom—are no longer required to “significantly change its business or operations,” as these changes are now simply limited to Sprint and T-Mobile and their respective, specific subsidiaries.

In a statement, CEO John Legere expressed his excitement to move forward, calling it an “important milestone” in his journey to build the new T-Mobile.  He also made sure to remind, however, that both companies still need to get approval from regulators before they can close the deal.

A merger between Sprint and T-Mobile will create a bigger company that is better poised to compete with their much larger industry rivals Verizon and AT&T.  To ensure healthy competition, Sprint and T-Mobile have promised to offer lower pricing options if the merger is allowed to go through.  Also, they say they need each other in order to introduce the 5G services that will increase competition in the future of the mobile technology and communications industry.

Of course, the CFIUS approval is still not the end for this process.  In fact, this is just the next step in the approval process will be to hear from FCC and DOJ antitrust officials who will determine if the deal will reduce competition or improve it as the companies had originally promised.

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