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T-Mobile and Sprint’s merger may actually cross the finish line, after new concessions from the companies eased concerns among government regulators.
The chairman of the Federal Communications Commission, Ajit Pai, signaled the shift early Monday. Pai said in a statement that he will “recommend to my colleagues that the FCC approve” the proposed $26 billion deal.
“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity,” Pai writes. “The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.”
In a blog, T-Mobile CEO John Legere said that the new company, called the New T-Mobile, will “cover 97% of the U.S. population with 5G on low-band spectrum and 75% of the population with 5G on mid-band spectrum” in three years, with an additional focus on using 5G to provide an alternative to traditional home broadband.
T-Mobile recently announced it was beginning to trial using its 4G LTE for home broadband while Sprint last week announced that its HTC 5G Hub, a hotspot that aims to replace a traditional modem and router, will be available in its first 5G markets on May 31.
In addition to promises for 5G rollout, an area of focus for the Trump administration as the world races to rollout the next generation network, Legere also says that as part of the deal the New T-Mobile will divest Boost Mobile, Sprint’s prepaid provider and a rival to T-Mobile’s own Metro.
“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. “And we’ll make sure that buyer has attractive wholesale arrangements.”
Legere also reiterated T-Mobile’s promise to keep prices at “same or better” levels “for three years.”
If the companies to fulfill their commitments to the FCC Pai adds that the companies could face “billions of dollars” in penalties, though an exact dollar amount was not specified.
“These consequences, which could include total payments to the U.S. Treasury of billions of dollars, create a powerful incentive for the companies to meet their commitments on time.”
The Department of Justice, which has also been looking at the T-Mobile and Sprint merger over possible antitrust concerns, declined a CNET request for comment on the new concessions and it is unclear if the DOJ will find the concessions to be enough to allay its concerns.
In April, a Wall Street Journal report suggested that some in the department was concerned that combining the nation’s third and fourth largest carriers would harm competition.
In subsequent tweets, T-Mobile CEO Legere and Sprint chairman Marcelo Claure each disputed the report with Legere calling the premise “untrue.”
Shares of both companies jumped after Monday’s news broke, with Sprint soaring over 23% to $7.64 in early trading and T-Mobile rising nearly 5% to $79.26.
News of the new concessions was first reported by Reuters, via CNBC.
This story is developing…