Shares of T-Mobile and Sprint plummeted in after-hours trading on Wall Street on Tuesday after reports suggested the Justice Department was leaning against approval of the $26 billion merger between the third and fourth largest U.S. telecommunications provider, respectfully.
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The transaction is under review by both the DOJ and the Federal Communications Commission. Executives at the two firms have positioned the deal as necessary for both T-Mobile and Sprint to be able to effectively compete against Verizon Wireless and AT&T in the roll-out of fifth-generation wireless technology, which promises broadband speed without a hard-wired connection.
But staffers in the antitrust division of the Justice Department earlier this month reportedly raised concerns over whether the combination would actually produce efficiencies, according to the Wall Street Journal.
Spokespersons for Sprint and the DOJ declined to comment. T-Mobile CEO John Legere took to Twitter to deny the story, calling it "simply untrue."
"Out of respect for the process, we have no further comment," he wrote in a post.
Opponents of the deal say it would greatly reduce competition in the U.S. wireless industry, lead to higher prices for consumers and negatively impact coverage in rural areas.
In an attempt to address those concerns, T-Mobile said previously it would withhold any price increases for three years after the merger is complete, a pledge that skeptics say is riddled with loopholes.
Legere and Sprint executive chairman Marcelo Claure have both defended the merger in front of House and Senate panels.