FCC Chairman Backs T-Mobile, Sprint Merger With New Conditions

FCC Chairman Backs T-Mobile, Sprint Merger With New Conditions

FCC Chairman Backs T-Mobile, Sprint Merger With New Conditions

On Wall Street, shares in Sprint Corporation were soaring towards 1600 GMT, up almost 24 percent on the prior days' close, while T-Mobile US had risen a smaller 5.6 percent.

The FCC move boded well for the Justice Department to also approve the deal, Citi analysts said in a note. According to terms of the deal, this is meant to "remove any remaining doubts regarding the impact of the merger on prepaid wireless customers and competition", nodding to concerns about the effect on lower-income Americans.

In his full statement, Pai said the companies had made a series of committments, including deploying a 5G internet network that would cover 99 percent of the country within six years.

Analysis America's Federal Communications Commission (FCC) is likely to approve a controversial $26bn merger between the third and fourth largest United States mobile carriers, T-Mobile and Sprint, sparking claims of regulatory inconsistency and coziness with the mobile industry.

They've also promised not to raise prices for three years.

Ajit Pai, chairman of the Federal Communications Commission, said both companies had promised his agency they would offer a next-generation 5G network to 99 percent of Americans within six years of completing the deal while also expanding access to mobile broadband.

"This sale is created to address potential competitive issues that have been identified in the prepaid wireless segment", he said in the statement.

"Huawei is a significant provider for rural broadband telecom companies". That just leaves the Justice Department standing in the way of T-Mobile gobbling up Sprint and all its yummy spectrum. If that doesn't happen, New T-Mobile will be subject to penalty fees.

Boost Mobile will be sold off as part of the deal. In its commitments to the FCC, the companies said they will "make available the same or better rate plans as those offered by T-Mobile or Sprint as of February 4, 2019 for three years following the merger".

Pai said Monday that the combination will help bring faster mobile broadband to rural Americans. "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?"

The impact of the merger on monthly cell phone bills is going to be another key area of focus for the Justice Department's review, even with T-Mobile's vow not to raise prices for three years.

T-Mobile claims in six years' time, 90 percent of the USA 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. T-Mobile is controlled by Deutsche Telekom, and Sprint is primarily owned by Japan's SoftBank. FCC officials said they believed that it could be easily and quickly upgraded to 2.5 GHz 5G.

Global competition to develop the technology has heated up but in a move widely seen as aimed squarely at Chinese rival Huawei, Washington has barred USA companies from engaging in telecommunications trade with foreign companies said to threaten American national security. The Justice Department is specifically looking at antitrust concerns. "But now the FCC wants to bless the same kind of consolidation for wireless carriers". It pledges to offer those speeds to 85 percent of rural America within three years and 90 percent in six years. The combined carrier also says it won't throttle or deprioritize Boost's traffic, which will presumably continue to use Sprint's network. "I have serious doubts".

Latest News