WASHINGTON, April 23 Competition is the
"watchword" when the U.S. telecom regulator reviews any industry
proposals, the Federal Communications Commission's chairman said
on Wednesday, addressing claims that Sprint Corp and
T-Mobile US Inc would fail without a merger.
Sprint's parent, SoftBank Corp, and its activist
chief executive, Masayoshi Son, have been waging an aggressive
campaign to buy T-Mobile. Investors are closely
watching for a possible merger, and how it might affect the two
larger carriers, Verizon Communications Inc and AT&T Inc
In an April 10 research note, New Street Research analysts
said Sprint and T-Mobile "are not both independently viable,"
citing a shortage of revenue to cover fixed costs.
FCC Chairman Tom Wheeler said "one of the interesting things
I've learned on various sides of this dais is that there is
always research that says, 'Well, here's this' or 'This could
"We're interested in making sure that 'competition,
competition, competition' is the watchword in industries over
which we have responsibility. And we'll focus on that like a
Wheeler was speaking after the FCC's monthly meeting to
reporters, who asked if he was concerned that Sprint or T-Mobile
might fail without a merger.
Wheeler and William Baer, who heads the antitrust division
at the U.S. Department of Justice, have publicly indicated their
disinclination to allow the U.S. wireless market to shrink from
four major competitors to three.
"What we are trying to do is make sure that there's
sufficient spectrum so that there can be sufficient
competition," Wheeler said when asked whether he considered the
U.S. wireless market competitive.
"This is a dynamic process; things change over time. And we
believe that what is extant in the market today in terms of four
major competitors is an important and driving force in the
competitive nature of that market."
Paul Gallant, analyst with Washington-based Guggenheim
Securities, said in a note that Wheeler's comments were
incrementally negative for the prospects of a potential merger
between Sprint and T-Mobile.
"Based on Mr. Wheeler's direct comments today, there appears
to be no softening in the FCC's position - and that a
Sprint/T-Mobile merger likely would be rejected by regulators if
it were proposed," Gallant said in the note.
T-Mobile shares closed 3.8 percent lower at $29.81, and
Sprint fell 2.6 percent to $8.37, both on the New York Stock
(Reporting by Alina Selyukh; Editing by Richard Chang)