The FCC looks poised to approve T-Mobile-Sprint merger

Andrew Cummings
May 20, 2019

T-Mobile and Sprint must commit to building out 5G over the next three years. In April, reports surfaced that Justice Department officials were not keen on the combination, citing erosion of competition in the wireless market should the bottom two of the four major wireless carriers merge.

On T-Mobile's website pushing for the merger they say: "It is absolutely imperative that the USA extends the global innovation, technology and economic leadership it seized during the 4G era". It also pledged to sell off Boost Mobile, the no-contract carrier that is now owned by Sprint. In order to receive approval from the FCC, the companies have promised to build out a 5G network that will be available for 97% of the USA population within three years of the deal's closing, and for 99% within six years. T-Mobile plans to use the 600MHz spectrum on LTE Band 71 for this effort. The carrier adds that it intends to get speeds of 100Mbps or higher to 99 percent of the USA population in six years and 50Mbps or higher to 99 percent of the population, and it says that it plans to verify those speeds with drive tests.

Shares of both Sprint and T-Mobile jumped after the news broke, with Sprint soaring over 26% to $7.79 in premarket trading and T-Mobile rising almost 6% to $79.85. T-Mobile is mostly owned by Deutsche Telekom. "Does anyone really believe that this FCC, which has asked nothing of the big mobile companies for over two years, will require the companies to abide by these commitments?"

T-Mobile claims in six years' time, 90 percent of the US population will be able to get download speeds of at least 100Mbps on its network, and 99 percent will experience download speeds of at least 50Mbps. They also committed to deploying 5G to 85 percent of rural Americans within three years and 90 percent within six years.

T-Mobile already provides average download speeds of 21.1Mbps, while Sprint's network offers an average of 13.9Mbps, according to OpenSignal data based on customer speed tests nationwide. That number will expand to 28 million eligible households in six years, including 5.6 million rural households.

A pledge to not raise prices "while the network is being constructed". T-Mobile stock gained almost 6% to around $79.70.

Sprint to say goodbye to Boost Mobile?

Selling Sprint's pre-paid carrier Boost Mobile. The no-contract carrier, launched in the 2001, is now a subsidiary of Sprint.

"We'll work to find a serious, credible, financially capable and independent buyer for all the assets needed to run - and grow - the business", Legere writes.

Finally, T-Mobile has reitereated its commitment to pricing post-merger.

Federal Communications Commission Chairman Ajit Pai plans to back wireless carrier T-Mobile's $26.5 billion takeover of rival Sprint, a crucial step for the deal's approval.

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