According to an article in the Wall Street Journal, Sprint Corporation (NYSE:S) Chairman Masayoshi Son and CEO Dan Hesse are scheduled for a meeting with the chairman of the Federal Communications Commission later today. Although the proposed Sprint and T-Mobile US Inc (NYSE:TMUS) merger deal is not the official reason for the meeting, and a variety of topics are expected to be covered in the visit, analysts say that the proposed merger is certainly going to be discussed.
The WSJ article also confirms that the same pair of senior Sprint Corporation (NYSE:S) executives recently met with officials at the Department of Justice.
Need for consolidation in the wireless industry
Both Sprint Corporation (NYSE:S) and T-Mobile US Inc (NYSE:TMUS) continue to argue that further consolidation is required in the wireless industry. They say a combined entity of the two companies is the only way to effectively prevent an AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) duopoly, and it will take the strength of the combined companies to be a real competitor to either one these titans.
The argument is weakened, however, by the fact that both companies are currently growing and not in any apparent danger of being swallowed up by their larger rivals, at least in the near term.
Dept of Justice skeptical
In an interview published in the New York Times last week, William Baer, an assistant attorney general in the DoJ antitrust division, said, “It’s going to be hard for someone to make a persuasive case that reducing four firms to three is actually going to improve competition for the benefit of American consumers. Any proposed transaction would get a very hard look from the antitrust division.”
Sprint CEO Hesse to attend event with Obama
On a related note, the WSJ article also pointed out that Sprint Corporation (NYSE:S) CEO Hesse was scheduled to attend an event with President Barack Obama to discuss Sprint’s work in an initiative to provide wireless service to thousands of schools, a point highlighted in the President’s recent State of the Union address.
As of 1 PM ET, Sprint Corporation (NYSE:S) is trading at $7.97, down 31 cents and T-Mobile US Inc (NYSE:TMUS) if trading down 21 cents at $30.36.
