Would three major carriers in the country instead of four put undue competitive pressure on smaller carriers? That’s the question the Department of Justice is looking to answer in a new probe related to the merger of Sprint and T-Mobile.
Sources to Reuters say that it wouldn’t necessarily be a direct competition issue as much as a supply-and-demand relationship as the two carriers provide wholesale data rates to mobile virtual network operators like FreedomPop and Google’s Project Fi. In fact, the department is said to be in talks with those small carriers — including Ultra Mobile, parent of Mint Mobile — for their opinions on the two companies’ $26 billion transaction.
Boost Mobile co-founder Pete Adderton has been a vocal supporter for a mandate to divest the combined company’s prepaid operations — T-Mobile’s MetroPCS and Sprint’s Boost and Virgin Mobile USA have a total share of 54 percent in the prepaid market. Other network insiders are watching wholesale rates to see if they’ll be tamped down for at least a grace period after a deal is closed.
The Department of Justice’s antitrust chief, Pete Delrahim, had told reporters this week that there are no “magical numbers” for major carriers in the US wireless market, but he will be conducting a routine, thorough review of the large merger.