A deal between Sprint and T-Mobile is nearly done but regulators may block the merger to preserve competition in the U.S. wireless communications industry.

SoftBank, the Japanese company that has majority stake in Sprint, is said to be moving ahead to acquire T-Mobile. Sprint and T-Mobile are currently placed at third and fourth position respectively in the U.S. wireless industry. AT&T and Verizon Wireless have over 100 million customers on their respective network, while Sprint and T-Mobile combined have a customer base of about 100 million. A merger would mean that the new entity will compete head-to-head with AT&T and Verizon.

SoftBank is said to be very close to buying a majority stake in T-Mobile through U.S. subsidiary Sprint, as early as next spring. The transaction is estimated to be more than 2 trillion yen (approximately $19 billion).

A Nikkei report cites sources familiar to the matter and suggests that the merger is in the final stages.

"It is in the final stages of talks with T-Mobile's German parent, Deutsche Telekom, sources close to the matter said. Purchasing T-Mobile would boost the SoftBank group's revenue from mobile operations to 7 trillion yen a year, making it the world's No. 2 carrier, behind China Mobile," reported Nikkei.

However, the deal needs approval from the U.S. Federal Communications Commission (FCC) and the Department of Justice (DOJ). Reports indicate that U.S. regulators are concerned and may reject the deal to preserve competition in the country's wireless communications industry.

The FCC is reported to have opposed such a transaction in 2011 when AT&T proposed to take over T-Mobile. Moreover, some market observers believe that the U.S. should in fact have four major wireless communications provider in the country, and not three.

However, in November this year, the DOJ gave a green signal to the merger between the American Airlines and the US Airways, which is one of the biggest deals in the aviation industry in the country.

The merger in the aviation industry may have lured SoftBank to go ahead and make a proposal to buy T-Mobile.

Shares of T-Mobile US closed up 2.30 percent at $32.93 on the NYSE on Thursday. 

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