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Boost Mobile Sale Among New T-Mobile-Sprint Merger Concessions

FCC

Federal Communications Commission (FCC) Chairman Ajit Pai on Monday announced his support for the proposed T-Mobile-Sprint merger after the companies said they would take a “series of significant steps” if their merger application is approved.

This comes after U.S. Department of Justice staffers last month told T-Mobile US and Sprint that their planned $26 billion mega-merger is unlikely to be approved as currently structured. The department’s antitrust division is considering whether the merger would pose an unacceptable threat to competition.

The FCC began its review of the merger last June.

FCC's Ajit Pai

FCC’s Ajit Pai

“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity,” Pai said. “The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.”

The companies have committed to deploying a 5G network that would cover 97% of the U.S. population within three years of the closing of the merger, and 99% of Americans within six years, he said. This network also would reach deeply into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years, he said.

Additionally, T-Mobile and Sprint have guaranteed that 90% of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99% would have access to speeds of at least 50 Mbps, Pai said.

“The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole,” he said. “I’m also pleased that the companies have committed to a robust build-out of their midband spectrum holdings. Demonstrating that 5G will indeed benefit rural Americans, T-Mobile and Sprint have promised that their network would cover at least two-thirds of our nation’s rural population with high-speed, midband 5G, which could improve the economy and quality of life in many small towns across the country.”

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

Sprint will divest its low-cost Boost Mobile wireless company, and that new company will promise to offer better prices than those currently offered by T-Mobile or Sprint for three years following the deal’s closing. In addition, the companies agreed to pay the FCC up to $2.4 billion in fines if they violate the agreement.

“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it,” Pai said. “This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.”

The commitments made to the FCC didn’t appease opponents of the merger. Fight for the Future said the merger would reduce the number of national wireless carriers from four to three, leading to “higher prices and …

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