T-Mobile and Sprint are closer to merging with promises of 5G, service to rural areas, and a nod from some regulators. The companies announced their merger in 2018. The new T-Mobile could pose a threat to Verizon and AT&T, and be better positioned to roll out 5G. Here’s everything you need to know.
The merger of T-Mobile and Sprint, the third- and fourth-largest carriers in the U. S., has been close to happening for years — but will it ever?
In April 2018, T-Mobile CEO John Legere took to Twitter to officially announce the merger, saying the two companies “have reached an agreement.” He posted a video of himself alongside Sprint CEO Marcelo Claure that provided some details on the merger. And the mobile carriers submitted a formal application to the Federal Communications Commission on June 18,2018, officially beginning the regulatory review process for the $26 billion deal.
The combined company would have more than 126 million customers, bringing it closer to rivals AT&T (141 million subscribers) and Verizon (150 million). The merger could also mean an improvement in overall 5G wireless technology, which promises greater, pervasive connectivity and faster speeds, but which involves costly and complicated development efforts.
We’ve got all the news and rumors to keep you up to date.
The U. S. government’s objections to the merger between Sprint and T-Mobile are starting to evaporate as Federal Communications Commission Chairman Ajit Pai and Commissioner Brendan Carr both signaled their support for the merger. Their backing is based on the two companies’ promise of rolling out an extensive 5G network, commitment to accelerated in-home broadband access to currently underserved communities across the country and in rural areas, and promise of increased competition in the U. S. wireless market.
In a filing on May 20, T-Mobile outlined a binding commitment to building out its 5G network and to escalating broadband wireless services to rural America. The telecom giant promised to construct its network in remote and unserved areas and to provide communities with independently verifiable fiber-like speeds. The T-Mobile-Sprint combined company will sell Sprint’s Boost Mobile prepaid cellphone company and commit to rolling out a next-generation 5G network that covers 97% of the U. S. within three years of the merger, and 99% within six years. This 5G network would include rural areas, with 85% of rural Americans covered within three years and 90% covered within six years alongside a pledge to guarantee 90% of Americans access to mobile broadband at speeds of at least 100 Mbps and 99% access to speeds of at least 50 Mbps.
This got a favorable response from some regulators. Said Pai: “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.
“The companies have also taken steps to respond to concerns that have been raised about this transaction,” Pai stated. “… in addition to their prior commitment not to raise prices for three years, T-Mobile and Sprint have decided to divest Boost Mobile. This sale is designed to address potential competitive issues that have been identified in the prepaid wireless segment.”
With regulators skeptical that the Sprint-T-Mobile deal will be good for competition in the U. S., Sprint and T-Mobile are reportedly considering concessions to save the deal, according to Bloomberg, which cites people familiar with the matter. Perhaps the biggest and most important of these concessions would be the sale of their prepaid businesses, which would be a pretty major step for both of the carriers. Other possible concessions include selling some airwave licenses.
It makes sense Sprint would want to make concessions to get the merger approved. Sprint posted another drop in subscribers by 198,000, which is the company’s worst drop since 2015.
It seemed for a while like Sprint and T-Mobile were finally going to merge, but now it seems as though the deal could never happen. According to a report from The Wall Street Journal, the Department of Justice has warned both T-Mobile and Sprint that the deal is unlikely to be approved in its current iteration.
So why is the deal unlikely to go through? According to the report, regulators are concerned that the deal could end up harming competition in the wireless industry in the U.
