US union opposes T-Mobile/Sprint merger

28 Aug 2018

US operator T-Mobile is facing a potential roadblock in its proposed $26.5 billion acquisition of Sprint, with the Communications Workers of America union objecting to the plan due in part to the potential for large-scale job cuts.

The union has filed a submission to regulator FCC arguing that the merger would result in the loss of more than 28,500 jobs as a result of the closure of overlapping retail stores and eliminating duplicate corporate positions, Bloombergreported.

Despite claims from the operators that a merger is needed to help the combined company cover the costs of a 5G rollout, the union also argued that the companies have given no demonstration that the merged company would have either the incentive or ability to provide quality 5G services outside of densely populated areas.

Finally, the union has claimed that with Sprint and T-Mobile having a history of strongly competing for each others' customers, a merger could reduce competition and drive up prices for consumers.

The FCC is consulting on whether to approve the $26.5 billion merger announced in April. This is the third time the two operators have attempted to merge, with previous attempts facing regulatory and other hurdles.

Sprint's 80% owner, Japan's SoftBank, would own 27% of the combined company under the merger terms.

Analysts expect that T-Mobile and Sprint may be required to agree to a number of conditions to secure approval for the merger.

These could include divesting spectrum, committing to maintain or increase headcount, and possibly reducing the proportion of the combined company in foreign hands. As well as Sprint's stake, T-Mobile parent Deutsche Telekom would own 42% of the merged company.

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