T-Mobile Deal Gets Service-Swapping Query in Antitrust Probe
(Bloomberg) -- Antitrust regulators probing T-Mobile US Inc.’s proposed purchase of Sprint Corp. are seeking data about U.S. customers changing mobile phone providers, a factor they could use in deciding whether the merger harms competition.
Such reports can also help show customer flow between carriers, said Harold Feld, senior vice president at the policy group Public Knowledge.
“If some large percentage (of T-Mobile customers) came from Sprint, you’d say, okay those guys are primary competitors with each other, so letting them merge is a bad idea," said Feld, who’s organization opposes the merger.
To buy Sprint, T-Mobile needs to convince Scheele and his colleagues that combining the nation’s third and fourth-largest mobile phone service providers won’t reduce competition and harm consumers who have enjoyed price cuts and easier contract terms as four companies slug it out.
Operating as T-Mobile, the combined company would have about $74 billion in annual revenue and 70 million wireless subscribers. Verizon Communications Inc. is the largest U.S. carrier with $88 billion in 2017 wireless revenue and 111 million subscribers, and AT&T Inc. would have $71 billion in wireless revenue and 78 million regular subscribers.
Some analysts are giving the transaction only 50-50 odds of passage over fears it will not survive antitrust scrutiny. The deal, announced April 29, also faces an FCC review.
T-Mobile has gained nearly 11 million regular subscribers in three years to overtake Sprint as the third-largest U.S. wireless carrier, and has earned a reputation as a creative competitor willing to attract customers by giving away Netflix subscriptions.
The data from the FCC could offer “a very granular picture of the level of competition,” Allen Grunes, an antitrust attorney formerly at the Justice Department, said in an interview.
Antitrust regulators will be able to see “how much competition is going on between the companies” and “where customers go when they switch carriers,” Grunes said.
Caroline Holland, a former chief counsel for competition policy at the Justice Department, described the data request as “pro-forma”
“DOJ is getting to work, that’s what it says” said Holland, now a tech policy fellow at Mozilla.
The Justice Department’s antitrust division didn’t respond to an email requesting comment. Neil Grace, an FCC spokesman, declined to comment.
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