What you need to know
- FCC Chairman Ajit Pai is recommending approval for T-Mobile and Sprint's merger.
- Boost Mobile will be sold off as part of the deal.
- T-Mobile and Sprint must commit to building out 5G over the next three years.
Updated 4:01 PM ET: Per a report from Bloomberg, today's news still isn't enough to sway the Department of Justice in favor of approving the merger. Specifically, Bloomberg says that, "The Justice Department is leaning against approving T-Mobile US Inc.'s proposed takeover of Sprint Corp. because the remedies proposed by the companies don't go far enough to resolve antitrust concerns, according to a person familiar with the review."
A little over a year after it was announced, T-Mobile's merger with Sprint is finally receiving a bit of good news following a couple of setbacks. According to a statement released on May 20, FCC Chairman Ajit Pai will recommend that the merger between the two U.S. carriers is approved.
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. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.
With that said, there's a bit more to this agreement than a simple approval. T-Mobile and Sprint have to agree to a trio of tasks, including:
- Building up the United States' 5G infrastructure over the next three years.
- A pledge to not raise prices "while the network is being constructed."
- Selling Sprint's pre-paid carrier Boost Mobile.
Following this news, John Legere took to Twitter to shed a bit more light on what all of this really means.
In regards to the 5G rollout, the "New T-Mobile" aims to offer speeds of at least 100Mbps across 90% of the U.S. within six years. If that doesn't happen, New T-Mobile will be subject to penalty fees. Looking at pricing, Legere notes that:
We guarantee that #NewTMobile will deliver the same or BETTER value to our customers. Prices will NOT go up for at least 3 years... and that includes 5G!!
As for the sale of Boost Mobile, Legere says that T-Mobile and Sprint have yet to find a buyer for the pre-paid network, but he notes that they're looking for a "serious, credible buyer with all the assets needed to run and grow the Boost business." Metro by T-Mobile and Virgin Mobile will continue to operate as usual.
T-Mobile and Sprint have until July 29 to get the merger approved, and while things are looking good with the FCC, there's still the matter of gaining approval from the Department of Justice.