What just happened? A major milestone has been met in the process of Sprint and T-Mobile attempting to merge into a single entity. Approval from a handful of federal agencies in charge of national security now places the deal mainly in the hands of the FCC for final approval.
As Sprint and T-Mobile continue the lengthy process of attempting a merger, the Committee on Foreign Investment in the United States, Department of Justice, Department of Homeland Security, and the Department of Defense have all given their seal of approval.
Collectively referred to as Team Telecom, the government body approval was given without any objections and withdrew a request to defer action on the proposed merger.
Now that one major step forward in the process has been achieved, the deal will still be subject to FCC approval as well as other regulatory approvals. If no regulators object to the deal, it will close during the first half of 2019.
Cybersecurity is at the forefront of reasons why the deal might be stopped in its tracks. Both Sprint and T-Mobile are owned by foreign businesses with close ties to Huawei. As the Chinese telecom business comes under further scrutiny, there is potential for objection on the grounds of security concerns.
The United States is still awaiting the extradition of Huawei CFO. Even though not directly related to the merger, any increased tensions with Huawei and China could throw a wrench into the plans of Sprint and T-Mobile given that both are Huawei customers.
Valued at $26.5 billion, the proposed merger would cause a shift in the market from two major carriers and two less competitive options into three moderately competitive wireless providers. As 5G networks start to take shape, a more unified landscape with three actual competitors could help promote a better customer experience.