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DOJ Examing How T-Mobile & Sprint Merger Would Affect Pre-Paid Pricing – Report

Could the planned $26.5 billion merger between T-Mobile and Sprint increase the price of pay-as-you go phone services as the number of available options for users drop? The Department of Justice is reportedly looking into that issue right, as part of its examination of the massive merger.

So-called "pre-paid" services -- where the user buys the phone and then pays for usage per gigabyte of data -- have been widely offered by mobile virtual network operators (MVNOs) over the Sprint Corp. (NYSE: S) network. While T-Mobile US Inc. bought prepaid operator, MetroPCS in 2013. (See T-Mobile Completes MetroPCS Merger.)

Reuters cites two unnamed sources, who say that the Antitrust Division of the U.S. Department of Justice is examining if the merger could lead to higher prices for prepaid users. (See T-Mobile to Buy Sprint for $26.5B to Create US 5G Powerhouse.)

One of the founders of Boost Mobile , which runs over the Sprint network, Peter Adderton, has already said that the operators should divest the brands if the merger is to ahead.

This could be interesting for T-Mobile, which has said that it needs all its spectrum if it is to deploy a nationwide 5G with Sprint. The operator got millimeter wave 28GHz licences -- then intended for short-range fixed wireless service -- when it bought MetroPCS. So the any MetroPCS divestiture could be important for its future 5G plans. (See Can the 'New' T-Mobile Make America's Networks Great Again?.)

— Dan Jones, Mobile Editor, Light Reading

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