The Federal Communications Commission has paused its months-long review of the proposed merger between Sprint Corp (S) - Get Report and T-Mobile U.S. (TMUS) - Get Report to examine what it called "significant new information" late Thursday in a move that could raise new concerns for the $26.5 billion tie-up.
The FCC said it needed more time to study a filing from T-Mobile earlier this week, which updated plans for the combined group's wireless home broadband service, and collect public comments. The Commission typically completes its merger reviews within a 180-day window, and will resume its "countdown" on April 4. leaving less than 60 days to approve or reject the planned combination of the nation's third and fourth largest carriers.
"When applicants have made substantial new submissions in support of their transactions after their initial applications, the Commission typically has sought additional comment from the public and paused its 180-day informal time clock to allow for staff and third-party review," the FCC said in a statement. "Doing so ensures that the public interest in a speedy review is balanced with the public interest in careful and thorough analysis and the need for third parties to comment on material information submitted by the applicants."
Sprint shares slipped 1.4% lower by mid-day trading Friday to change hands at $6.21 each while T-Mobile shares were marked 0.8% lower at $70.75, trimming their year-to-date gain to around 11%.
T-Mobile CEO John Legere wrote in a blogpost late Thursday that the Sprint tie up will allow the combined group to offer "a real alternative option" of "a fast and reliable in-home broadband".
"All the big guys - Charter and Comcast and AT&T and Verizon - seem to be playing nice with each other and never stray into each other's turf," he said. "This is working for their benefit but it's hurting consumers - and that's not right!"
"The New T-Mobile is going to break up this love fest by using the massive capacity gains and dramatic increases in speed to accomplish something not previously possible," Legere added.
Legere, as well as Sprint executive chairman Marcelo Claure, will testify before a Democrat-controlled House anti-trust committee on March 12. The Department of Justice, as well as the FCC, will also need to approve the merger.