Sprint and T-Mobile’s $26bn merger wins Department of Justice approval
Sprint and T-Mobile have won approval from the Department of Justice (DoJ) for their $26 billion merger proposal.
“Today marks an incredibly important step forward for the New T-Mobile. We are ready to bring this supercharged Un-carrier to consumers and businesses across the country, and this milestone brings us much closer to making that vision a reality for customers everywhere!” said T-Mobile CEO John Legere.
Regulators have scrutinised the proposed merger over concerns that a reduction to just three major carriers in the US would harm competition. While the FCC expressed it was in favour of the merger, the DoJ was expected to be a bigger hurdle.
While the merger is yet to officially clear the FCC, it's looking set to clear the regulator following a number of concessions including a consumer price freeze for three years, a pledge to take on ‘the cableopoly’ of US broadband providers, and to blanket 97 percent of the nation with 5G within three years.
In order to appease the DoJ, T-Mobile and Sprint had to make several more promises. The biggest concession is to sell off assets to Dish in order to help it become a new competitor and fill the fourth operator void left by the merged entities.
Sprint’s prepaid business, including Boost Mobile, will be divested to Dish which has unused spectrum ready to be allocated.
The DoJ believes its strategy will help T-Mobile and Sprint merge into a bigger player to improve the rollout of 5G and increase competitiveness against larger rivals like AT&T and Verizon, while also establishing a strong fourth operator in Dish.
Rolando Hernandez, VP at mobile solutions provider Valid, commented: “The approval of the T-Mobile-Sprint merger is great news for the industry because it’s an opportunity in the end for better services for consumers.
“Together, T-Mobile and Sprint can compete with AT&T and Verizon in more fair conditions given all of them will now be a similar size. Standing on their own, the two carriers were treated almost as equals, forcing them to offer similar services, coverages, and prices. They couldn’t have grown or developed much further trying to compete in an unfair market.
“Now, that’s all changed. With the addition of Sprint’s assets, the new T-Mobile can focus on its technology initiatives, like expanding 5G across the country and increasing IoT connectivity.”
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