Sprint and T Mobile haven't even announced their anticipated murder deal, and it's already facing significant legal questions. Antitrust staff attorneys at the Justice Department are likely to view the deal as a threat to competition in the mobile phone market. That's according to a new Bloomberg News story that cites three people familiar with the staff. Thinking with us to talk through the regulatory prospects of a Sprint T Mobile acquisition if it indeed comes to pass. Is Jennifer Ree.
She is a senior litigation analyst for Bloomberg Intelligence and a regular welcome guest here on Bloomberg Law. Jen thanks for joining us. Um sketch out if you wait quickly. First, just the state of the mobile phone market. Where do Sprint and T Mobile fit? What share the market? Do
they have that sort of thing? Suret Thanks for having me, Greg and June Um Well, right now, essentially in the U s they're just really four big wireless players, and I think most people know that with Verizon is the biggest at a round percent based on Bloomberg data, which which isn't precise, but it's close. Eighteen te at about market share, T Mobile at about and Sprint at about eleven and then leaves about ten percent for a lot
of smaller, non national type players. Had things in the marketplace changed a lot since the previous attempt to merge the companies was rejected, or is it more about the change in administrations? You know, I think things have changed, but a lot of things have also stayed the same. About what was problematic in the past, some of those factors will remain problematic today. And of course the administration is changing too, and there's been a lot of speculation
about that. And I think historically Republican administrations do tend to be easier on deals than democratic ones, but not in an extreme manner, really only on the fringe, just sort of the slightest bit. There isn't really a big difference in the evaluation that that the antitrust regulators will go through to determine whether a deal might be harmful to a market is the same no matter what political
party you come from. So, as you laid it out, W and T Mobile are a distant third and fourth in the market, and and I think one can anticipate if they go forward with this, they will argue that we will be a stronger competitor to Verizon and a T and T um. Is that an argument that you see as having the potential to have some legs to it, Greg, I think it's one of the best arguments they have.
I think it's a good argument, and I think it's it's likely, you know, a good argument for them to go in with, and and if they have any chance at all, it's it's probably based on something like that. I think the problem here is that it's an uphill climb.
They walk in, you know, with the odds against them, because as a threshold matter, the agencies will ask, the d o J will ask what is the concentration in the market, And that's just a matter of math, And they take those market shares, they square them, and they sum the squares, and they look at the difference before the merger and after the merger, and if those numbers exceed that change that difference exceeds two hundred, which it does here in a market that is deemed to be
highly concentrated, which this is automatically, they consider that as a threshold matter, to be a deal likely to cause harm to the market. So once the staff attorneys make their decision, and we assume that they're going to Let's say, let's assume that they're going to decide against it. What happens then, As far as the new antitrust chief, what do we know about him and his opinions about things
like this? Really good question, June, because it's interesting. You know, he is what I don't know him personally, but I has a reputation as you know, a very good antitrust lawyers, sort of a typical Republican, you know, his his evaluation will be based in economics, based on the you know, the guidelines that have been developed over the years and the agencies, you know, not somebody who's going to be
you know, too crazy or creative with these things. Um. He has said in the past that this was several years ago and things were a little different, that he did see that the a T and T T mobile tie up would be a problem, but maybe perhaps a Sprint T Mobile tie up would be more palatable. So I think that's given a lot of people this idea that maybe he'll look at this, consider it, and and
allow this deal to go through. But I think what has changed, um in the last few years is that we've seen T Mobile come back, become very competitive, sort of act like a maverick in the industry, and incentives could change if they get bigger emerging with sprint UM and you know, this could be an issue, and I think things are different now in that respect than when
he made that comment. There's also the Federal Communications Commission. Uh, do they present a significant additional obstacle for the companies here? They present an additional obstacle, But I think that the prevailing opinion here is that the bigger obstacle will be the d o J. You know, it's unclear on both sides what those what those leading the two agencies will
do and how they think about this deal. But I think there's more indication in the market that a g pay on the FCC side seems to be more amenable to it, perhaps than the d o J is. So most think that the bigger um hurdle will be the DOJ review. Jen, what's your bottom line and just twenty seconds or so, what do you think based on what you know now, what are the chances this deal would would get approval? I think it has better chances than
it would have several years ago with Democrats. I still think it's chances are very low below Okay, that was Jennifer Ree. She's a senior litigation analyst for Bloomberg Intelligence, saying that the chances might not be good assuming Sprint and T Mobile go ahead with their anticipated merger proposal.