The U.S. Justice Department has informed the senior executives of T-Mobile US and Sprint about their concerns about their proposed $26 billion merger in its current structure, Reuters reported.
A Wall Street Journal report said U.S. Justice Department will not approve the merger in the current structure.
T-Mobile US is owned by Deutsche Telekom of Germany. Sprint is owned by SoftBank of Japan. Both Germany and Japan are yet to ban 5G network from Huawei under the pressure from the US administration.
Earlier, consumer advocates and some lawmakers criticized the deal because it would reduce the number of national wireless carriers to three from four.
T-Mobile, the third largest telecom operator, has defended the merger, saying the combined company would be better and faster at building 5G to compete with industry leaders AT&T and Verizon.
A final decision on the deal is likely near the end of the 180-day Federal Communications Commission review period that expires in June.
T-Mobile US CEO John Legere, who was in Washington on Tuesday and will have meetings later this week at the FCC, denied this on Twitter.
Sprint Chairman Marcelo Claure said the Wall Street Journal report was not accurate. “We continue to have discussions with regulators about the merger with T-Mobile,” Claure wrote on Twitter.
The agreement to combine the #3 and #4 carriers, struck in April 2018, was approved by both companies’ shareholders in October and has received national security clearance. They still need approval from the Justice Department and FCC. A number of state attorneys general are also reviewing the deal.
Executives from T-Mobile and Sprint faced questions from lawmakers in February about how the companies’ planned merger would affect prices and jobs, especially in rural America.
A group of eight Democratic U.S. senators and independent Senator Bernie Sanders urged the Justice Department and FCC to reject the deal, saying monthly bills could rise as much as 10 percent.
T-Mobile earlier said it would not increase wireless prices for three years and has pledged to use some spectrum for wireless broadband in rural areas to win support for the deal.
John Legere has also pledged to build 5G network without using networking equipment from Huawei Technologies or ZTE.
