T-Mobile and Sprint’s $26.5 billion merger is almost complete. Following months of delays and push back from high-profile authorities, a US district judge has ruled in the companies’ favor, allowing them to move within one step of concluding a deal that promises to deploy 5G service to 97 percent of Americans within three years.
The merger — which was approved by the Department of Justice in July 2019 and by the FCC in November 2019 — has faced major opposition from state attorneys general around the US. According to the lawsuit against this “megamerger” — signed by 18 attorney generals including Josh Shapiro — the merger would “severely undermine competition in the telecommunications sector,” in turn “driving up prices, limiting coverage, and diminishing quality.”
However, in order to obtain permission for the deal from the Department of Justice, T-Mobile and Sprint suggested a number of caveats designed to mitigate the union’s competitive advantage. The companies will have to sell the prepaid parts of Sprint’s business — Boost Mobile, Virgin Mobile, and Sprint prepaid — to competitor Dish, which will also gain access to the pair’s 20,000+ cell sites and retail locations. Sprint began shutting down Virgin Mobile and migrating customers to Boost Mobile on February 2nd.
Additionally, T-Mobile has to offer Dish “robust access” to its mobile network for seven years while the latter creates a 5G network of its own. According to the Justice Department, this will “enable a viable facilities-based competitor to enter the market.”
As well as rolling out what T-Mobile and Sprint call a “robust” 5G network, they’ve also pledged to provide 90 percent of Americans with access to mobile service with speeds of at least 100 Mbps within six years. Like the Department of Justice, the FCC had its own conditions for approval — if the companies don’t meet these goals, they could be fined more than $2 billion. That’s not an insignificant sum, so those are not conditions the companies are likely to agree to lightly. However, with their extensive combined network and a goal that will force other carriers to take reactive measures — not to mention the struggle involved getting to this change — the new partnership is no doubt determined to succeed. With this hurdle cleared, the deal will likely be completed imminently.