T-Mobile, Sprint weigh concessions to win federal approval for $26.5B merger

T-Mobile and Sprint are reportedly considering a sale of businesses and spectrum as a route to appease regulators and improve the chances that their proposed $26.5 billion merger wins federal approval.

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The two firms continue to seek backing from the Department of Justice and Federal Communications Commission for the deal, though officials are said to be inclined to block it.

Alongside touting the number of jobs that a combined entity would create and promising to hold off on price increases, T-Mobile and Sprint are also considering selling their prepaid wireless businesses and selling spectrum or licenses, among other steps, according to Bloomberg.

Spokespersons for T-Mobile and Sprint did not immediately respond to request for comment. It is not uncommon for firms to have to shed some assets in order to convince federal regulators to approve a merger.

The combination of T-Mobile’s Metro brand and Sprint’s Boost and Virgin Mobile brands would create a prepaid giant with a 42 percent market share.

Prepaid plans are often sought by those with low-to-no credit and do not require monthly subscriptions. Critics have assailed the deal between T-Mobile and Sprint -- the third and fourth largest U.S. carrier, respectively – as one that would predominately impact rural communities and poorer customers.

TickerSecurityLastChangeChange %
SSPRINT CORP.5.51+0.10+1.85%
TMUST-MOBILE US INC77.69+0.75+0.97%

The companies argue they must combine to effectively compete against larger rivals Verizon and AT&T, including on the launch of pending fifth generation wireless networks.

While some media reports indicated the DOJ was inclined to block the transaction, T-Mobile CEO John Legere and Sprint Chairman Marcelo Claure both took to Twitter to deny the reports.

T-Mobile and Sprint previously promised the combined entity would spur at least 1,600 with a new customer service center in New York.

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Sprint has also warned that it’s on an unstainable path without the approval of the merger and said its geographic focus would "narrow" if the transaction is denied.