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Makan Delrahim testifies before the United States Senate Committee on the Judiciary on his nomination to be an Assistant Attorney General, Antitrust Division of the US on Capitol Hill in Washington, DC on Wednesday, May 10, 2017.
Ron Sachs | dpa | AP Images
Despite reports that it won’t be approved, the chief of the Department of Justice antitrust division said he has yet come to a decision on Sprint and T-Mobile‘s planned merger.
“I have not made up my mind,” Makan Delrahim, assistant attorney general for the Department of Justice antitrust division, told CNBC’s David Faber during a “Squawk on the Street ” interview Monday from the Milken Institute Global conference in Beverly Hills, California.
His comments come weeks after the Wall Street Journal reported the $26 billion planned merger is unlikely to be approved in its current structure, citing people familiar with the matter. The report casts doubt on the fate of the mega-deal. The most immediate hurdle, according to the Journal, came from Delrahim’s antitrust division, which is reportedly considering whether or not a deal would present an “unacceptable threat to competition.”
Shares of Sprint fell as much as 12 percent after that report earlier in April, while T-Mobile dropped by 4 percent. Sprint shares were slightly positive after Monday’s CNBC interview, while T-Mobile’s stock was down more than 2 percent.
Delrahim said his department does have an eye on price competition, and potential for more consolidation in the industry to raise bills for the average consumer. The DOJ is looking into “coordinated effects,” meaning companies would not compete on prices anymore if it’s no longer in their best interest.
“Those are the factors and there are strict guidelines that we follow, based on case law handed to us, we are continuing to investigate that,” he said. “My job is to make sure the analysis is done properly and make sure the facts are there.”
The $26 billion deal would combine the third- and fourth-largest wireless providers in the U.S., a market with only two other participants: AT&T and Verizon. Sprint and T-Mobile have argued that the merger is necessary to compete with the two larger carriers, and would provide greater access to 5G. T-Mobile CEO John Legere defended the deal before Congress In February, arguing that the deal would create jobs and lower prices.
“With 5G and other technologies, you’re going to be able to use that phone for more than just communicating with your best friend or texting,” DOJ’s Delrahim said. “You’re getting your media, you’re getting video — we want to be sure to encourage that, but ultimately, is there going to be a price effect when those two combine?”
While more players in any market typically means more competition, Delrahim said there was no ideal number for the total amount of wireless companies.
“There is no magical number — it’s what the facts and the economic evidence shows us,” Delrahim said.
— CNBC’s Christine Wang contributed reporting.