Top executives from T-Mobile and Sprint have started convincing the US officials to approve the tie-up between the two telecom companies. T-Mobile CEO John Legere, COO Michael Sievert, and Sprint Chairman Marcelo Claure along with others met Jessica Rosenworcel who is the Federal Communications Commissioner.
The merger of T-Mobile and Sprint is valued at $26 billion and would reduce the competition from four to three, with the other two being Verizon and AT&T. The merger which was proposed last year will have to be approved by FCC and the Justice Department who are the regulatory bodies.
Both firms in a presentation have said that the main focus for them would be to take the Verizon and AT&T customer share by offering aggressively low prices. The tie-up if approved will create 127 million customer base.
The T-Mobile CEO in a letter to the FCC chairman said that he would ensure that the customer plan prices would remain the same for the next three years if the proposed tie-up is approved and also mentioned that the two firms will offer same or better prices that are currently available. Some of the excerpts of the letter said
‘Critics of our merger largely employed by Big Telco and Big Cable have principally argued that we are going to raise rates right after the merger closes. I want to reiterate, unequivocally that new T-Mobile rates are NOT going to go up. Rather our merger will ensure that American consumers will pay less and get more.’
T-Mobile has employed former FCC commissioner Mignon Clyburn as an adviser for the deal in an effort to step up lobbying. Clyburn can swing the deal in the companies favor as she is part of many public interest groups and she believes that the merger could bridge the digital divide and help the rural areas.
Concerns about the deal
The letter written by the CEO may be official, T-Mobile can at any time after the merger increase the rates without facing any consequences as the letter is not legally bound. Earlier, several senators including Bernie Sanders recommended the approval authorities to reject the deal as the costs for the customers could rise. Moreover, if the tie-up happens, the number of providers reduce which is not good.
As per sources, the Justice Department is not happy with the merger in its current form, and it is to be seen whether the merger will get the green light.