U.S. pauses T-Mobile-Sprint review in sign of fresh turmoil

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WASHINGTON (March 8): The Federal Communications Commission on Thursday paused its review of T-Mobile US Inc’s proposed purchase of Sprint Corp, adding to an already protracted battle to win approval to combine the third- and fourth-largest U.S. wireless providers.

The move from the Republican-led agency created fresh turmoil for the US$26.5 billion merger, which has been under review for more than eight months.

“All indications were this would be decided in the next few weeks” but now it appears “they haven’t made the case to the policy makers,” said Gigi Sohn, a former FCC aide and merger opponent. “They’re still grasping at new theories.”

The FCC, in an order posted online, said it wanted time to examine “significant additional information” filed last month and on Wednesday, when T-Mobile offered a 63-page filing updating plans for wireless in-home broadband service.

Comments on the new submissions are due March 28, the FCC said. It paused a counter that tracks how many days the deal is under review at 122 days until resuming April 4. The agency attempts to complete its reviews in 180 days.

The deal, which was filed with U.S. regulators in June, has drawn criticism from Democrats and policy groups who say it would reduce competition, threatening higher prices. The companies say that together, they can create a stronger competitor to industry leaders AT&T Inc and Verizon Communications Inc.

T-Mobile and Sprint each have foreign owners that will have significant roles in the combined entity. Deutsche Telekom AG, based in Bonn, would own 42% of the new company, while Tokyo-based SoftBank Group Corp would own 27%.

The deal needs approval from the FCC and antitrust regulators at the Justice Department.

In its March 6 filing, T-Mobile said the merger would “unleash a disruptive and effective competitor upon an in-home broadband industry typified today by extreme and growing consumer dissatisfaction.”

In a statement T-Mobile said, “We believe it is a positive step that the FCC is so deeply engaged in understanding this transaction and our recent filing, and we completely understand their desire to have these short, routine, clock stoppage cycles to fully review the merits of our merger with Sprint.”

“We continue to look forward to completing the regulatory approval process in the first half of this year,” the company said in the statement.

T-Mobile, based in Bellevue, Washington, rose 54 cents to US$71.32. Sprint, based in Overland Park, Kansas, went up 6 cents to close at US$6.30. Deutsche Telekom declined 0.2% in Frankfurt at 9:03 a.m. on Friday. SoftBank fell 2% in Tokyo.

Scrutiny of the deal is set to intensify. The Democratic-led House anti-trust sub-committee has called T-Mobile Chief Executive Officer John Legere to testify at a March 12 hearing, alongside Sprint Executive Chairman Marcelo Claure and critics of the merger. State attorneys general are expressing concerns that the deal could lead to higher prices for consumers.