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Wells Fargo Analyst: T-Mobile-Sprint Tie-Up Could Progress Next Week

Jayson Derrick

The pending merger between telecom companies T-Mobile Us Inc (NASDAQ: TMUS) and Sprint Corp (NYSE: S) could take a step closer to finalizing, Wells Fargo's Jennifer Fritzsche told CNBC Friday.

What Happened

The T-Mobile and Sprint merger remains stuck in the regulatory process, but the Department of Justice could come out in favor of a merger next week, Fritzsche said during a "Squawk Box" interview.

A handful of individual states remain active in blocking the deal from occurring, although this could change based on the DOJ's report, she said. 

The DOJ itself may have been "caught off guard" by the handful of individual states taking action to block the merger, Fritzsche said.

Why It's Important

Some of the factors the DOJ could impose on the two telecom companies may include spectrum divestitures and the creation of a new national competitor, the analyst said. If that proves to be the case, then the argument that the merger will worsen the competitive landscape may be difficult to continue justifying, she said. 

"The state's argument that four [national telecom providers] going to three is terrible for the industry kind of goes away," Fritzsche said.

"Essentially, four remains four depending on the concessions that we think will come."

What's Next

If the DOJ allows a combined company to keep Sprint's notable 5G spectrum, it could be "more competitive for pricing," the analyst said.

This would be a positive for the consumer and a negative for the remaining competitive landscape, she said. 

Five years from now, the merger is likely to prove to be positive for the consumer and good for innovation and job creation, Fritzche concluded. 

T-Mobile shares were up 0.24% at $76 at the time of publication Friday, while Sprint shares were trading higher by 1.29% at $7.07. 

Related Links:

Report: Sprint, T-Mobile May Consider Concessions To Gain Merger Approval

Guggenheim: T-Mobile Home Broadband Aimed At Boosting Sprint Merger, Not A Threat To Cable

Public domain photo via Wikimedia

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