T-Mobile doesn’t seem to be too worried about getting approval from the California Public Utilities Commission for its proposed takeover of Sprint. The company’s chief financial officer, Braxton Carter, spoke at an investment conference in Barcelona last week, and offered an optimistic timeline to complete the transaction…
The goal, we believe, is still to close this transaction…in the first half, probably in the second quarter of ’19. You look at the shot clock with the FCC, it’s really implying a very early April end of that shot clock at this point, and that’s why I’m more pointing to the second quarter is more probable. It can still be first quarter, but it’s going, we think, exceedingly well. But I think by the end of the year, we’ll be in a much better position.
Braxton’s focus is on regulatory approval from the federal justice department and the Federal Communications Commission – he didn’t mention state-level reviews at all – so he might or might not be factoring the CPUC’s process into his estimate. The timeline for the CPUC’s review calls for a decision to be reached in the second quarter of next year, too, but earlier indications were that means sometime in the summer of 2019, perhaps June.
The CPUC’s review potentially includes a wide range of issue – no particular limits were set on the extent of the inquiry – but big question is the impact the merger will have on competition in California’s mobile marketplace. Overall, U.S. consumers already pay the highest prices for mobile bandwidth in the developed world. Going from four national competitors down to three would mean a significantly less competitive environment for mobile customers. T-Mobile’s counter argument, according to Braxton, is that it’s really about “two going to three, the creation of a third, more-scaled national player to compete against a predatory duopoly that controls 85% of the cash flows in the marketplace”.