T-Sprint

T-Mobile / Sprint Merger, A Threat To National Security?

There’s plenty of reasons why you wouldn’t want T-Mobile’s merger with Sprint to go through with zero restrictions, but if concerns about reduced competition, higher prices, damage to the prepaid industry or job losses don’t have you sold, representatives in Congress have got you covered.

Bloomberg obtained a draft letter that House representatives reportedly intend to send to Treasury Secretary Steve Mnuchin next week, raising concerns about the deal from a national security perspective. The combined New T-Mobile company will be mostly owned by two foreign companies, Japan’s SoftBank and Germany’s Deutsche Telekom.

Any significant merger or takeover that involves foreign control requires approval from the Committee on Foreign Investment in the U.S. (CFIUS), overseen by Mnuchin. Earlier this year, the CFIUS recommended blocking a deal that would have seen Singapore-based Broadcom take over Qualcomm, America’s marquee chip designer. Since T-Mobile and Sprint have been stressing how the merger is necessary for the US to have a world-class 5G network, foreign ownership of that network may be ringing alarm bells in Congress.

Analysts are relatively optimistic that the deal will go through at this stage, but several different branches of government will need to weigh in before the merger can be approved. The FCC will have to sign off on the deal as it involves merging two wireless companies (and their spectrum assets); the Department of Justice’s antitrust division is interested in the competition effects, the CFIUS (and White House) will be concerned as to the national security implications, and a handful of House and Senate committees will want their few minutes in the limelight as well.

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