SoftBank and Deutsche Telekom are reportedly preparing to announce a merger between their US carriers, Sprint and T-Mobile. Sprint has upped its lobbying power in Washington to assuage regulators from the FCC and Department of Justice. Still, in order to be competitive with AT&T and Verizon, the two will have to retain as much spectrum as possible.
Reuters reports from its sources that the two will not plan for any divestitures when announcing the merger deal, thought to be within the next month. The two look to keep as much spectrum and cost structures before having to make way for government demands. Regulator concerns dashed a merger attempt in 2014 under the Obama administration. The Trump administration is expected to be friendlier and more lax on the regulatory side.
“It is better for Sprint and T-Mobile to listen and learn the concerns of regulators first, and see whether there is anything that can be done to address those concerns,” MoffettNathanson research analyst Craig Moffett said.
However, one source says that the two companies have not set a cap on what they would be willing to divest to satisfy regulators.
All together, the two companies have more than 300MHz of bandwidth. T-Mobile has valuable low-band deposits at 700MHz and it also has its new and much vaunted 600MHz licenses gained from this year’s FCC auction. Sprint has a trove in the 2.5GHz region. It is the 600MHz and 2.5GHz bands that are being pushed for 5G development through at least 2020.