Sunday, 16 June 2019

Sprint and T-Mobile merger takes a huge step towards completion, as FCC chairman backs the deal

By Chris Kelly, Total Telecom
Monday 20 May 19

Ajit Pai says that he intends to recommend that the FCC endorses the proposed merger, but the regulator is yet to officially announce its verdict

The chairman of the Federal Communications Commission (FCC), Ajit Pai, has backed the proposed $26 billion merger of T-Mobile and Sprint in the US. The FCC's five-member voting committee is yet to officially rule on the merger, but chairman Pai's endorsement bodes extremely well for America's third and fourth biggest telcos. “In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date…

The chairman of the Federal Communications Commission (FCC), Ajit Pai, has backed the proposed $26 billion merger of T-Mobile and Sprint in the US.

The FCC's five-member voting committee is yet to officially rule on the merger, but chairman Pai's endorsement bodes extremely well for America's third and fourth biggest telcos.

“In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it. This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity,” Pai said in a statement to the press.

Pai said that he had been impressed with both companies' commitment to rolling out comprehensive and wide reaching 5G services, saying that the merger would be a force for the good in America's quest for 5G supremacy.

“The companies have committed to deploying a 5G network that would cover 97per cent of our nation’s population within three years of the closing of the merger and 99 per cent of Americans within six years," Pai said.

"This 5G network would also reach deep into rural areas, with 85 per cent of rural Americans covered within three years and 90 per cent covered within six years. Additionally, T-Mobile and Sprint have guaranteed that 90 per cent of Americans would have access to mobile broadband service at speeds of at least 100 Mbps and 99 per cent would have access to speeds of at least 50 Mbps.

Pai also said that the company's commitment to investing in mid-range 5G spectrum had been a deciding factor in his decision to endorse the merger.

“I’m also pleased that the companies have committed to a robust buildout of their mid-band spectrum holdings. Demonstrating that 5G will indeed benefit rural Americans, T-Mobile and Sprint have promised that their network would cover at least two-thirds of our nation’s rural population with highspeed, mid-band 5G, which could improve the economy and quality of life in many small towns across the country," he said.

Last week, rumours circulated in the press that T-Mobile and Sprint would be forced to sell of off their pay-as-you-go business subsidiaries (Metro, Cricket and Virgin Mobile) to allay concerns about a lack of competition in the pre-pay market, and to force their proposed merger over the line. It is not clear at this point whether the FCC will insist upon this course of action being taken before it offers its official backing.

In order to proceed with the merger, T-Mobile and Sprint will have to win regulatory approval from both the US Justice Department’s antitrust division and the Federal Communications Commission. Both entities are due to rule on the proposed merger in the coming months.  

 

 

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