The Federal Communications Commission has confirmed its approval for T-Mobile US's takeover of Sprint, merging the third and fourth largest mobile operators in the US. The approval order comes with a number of conditions, including commitments to expand broadband coverage in the US.
The FCC said the deal could be considered in the public interest and it will support a significant expansion of 5G services in the US. T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97 percent of the population and within six years to reach 99 percent of all Americans. This includes deploying 5G service to cover 85 percent of rural Americans within three years and 90 percent within six years.
The companies also pledged that within six years, 90 percent of the population would have access to mobile service with speeds of at least 100 Mbps and 99 percent could access at least 50 Mbps. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps and 90 percent of the rural population able to receive at least 50 Mbps.
An independent third party will conduct drive tests to verify the companies meet the commitments. If they do not, penalties of USD 2 billion over six years may accumulate, plus additional payments.
No competition concerns
In terms of competition concerns, the Commission said it expects the deal would enhance competition in rural America and among "quality-conscious consumers", along with strengthening competition in the home broadband and enterprise markets. The planned sale of Sprint's prepaid brand Boost Mobile would address the potential for reduced competition for "price-conscious consumers in urban areas", the FCC said.
The FCC first announced the agreed conditions in May and has now given its formal approval. It also supported the Department of Justice's agreement with T-Mobile and Sprint, to divest additional assets to Dish so it can create a new mobile operator. To facilitate the Dish deal, the Commission has proposed modifications to construction deadlines related to Dish licenses.
Closing expected in early 2020
Softbank, the controlling shareholder of Sprint, said this completes the federal regulatory approvals required to close the transaction. The companies still face a lawsuit from certain states that have refused to approve the merger due to competition concerns; this case is expected to start hearings on 09 December.
In a SEC filing, T-Mobile said 19 states have backed the deal and 18 have already given their approval, and it remains in talks with the others to try to gain support. The aim is to close the merger in early 2020, according to the company. On 07 November, T-Mobile plans to announce more on its plans after the merger.
