Sprint’s (S -2.3%) case to regulators for a $26B merger with T-Mobile (TMUS -2.9%) leans on the assertion that it won’t be an effective competitor without the deal — but some officials are skeptical of that, Bloomberg reports.
The No. 4 U.S. wireless carrier has said it might run out of cash if the merger fails, according to the report.
Those arguments, part of a so-called failing firm approach that suggests competition will be lessened with the failure of a player, are “relatively weak,” according to a former FCC wireless bureau chief.
Sprint and T-Mobile are also arguing that the combined company will help the U.S. win the race to 5G commercialization, though the Justice Dept. doesn’t consider industrial policy, focusing instead on harm to competition.
Source: M A News on Seeking Alpha