T-Mobile and Sprint are currently seeking regulatory approval for their proposed merger in the US

The proposed merger between Sprint and T-Mobile took an unexpected hit today, when sources from the Department of Justice hinted that they were preparing to block the deal.

It appeared that the $26 billion merger between America’s third and fourth biggest telcos was poised to pass, when FCC chairman Ajit Pai came out in support of the deal earlier this week.

However, sources close to the matter told journalists from Reuters that the Department of Justice was preparing to block the deal, on the basis that it would reduce competition in the wireless market.

Sprint and T-Mobile have already agreed in principle to sell off their pay-as-you-go businesses, in order to expedite the merger. It is now believed that the Department of Justice may require further concessions before it is prepared to pass the deal.   

If the merger was to pass, T-Mobile and Sprint would hold a combined 30 per cent of the US wireless market, with AT&T and Verizon holding 34 per cent each.

In order to secure the deal, the pair will need to secure regulatory approval from both the FCC and the Department of Justice. Both entities are expected to give their official verdict within a month.  

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