Sprint, T-Mobile mega-merger gets nod from key U.S. official

Sprint, T-Mobile mega-merger gets nod from key U.S. official

T-Mobile and Sprint are on the brink of clearing one of the two major regulatory hurdles to their blockbuster telecommunications merger.

The decision raises the chances the merger will win final approval from federal authorities but the companies still face an anti-trust review by the US Department of Justice.

While Pai's backing is important, further steps remain.

This news comes hours after FCC Chairman Ajit Pai publicly pledged his support for T-Mobile and Sprint's merger.

Under the terms of the agreement, the companies also committed to not raise their rates for three years after the merger.

Ajit Pai, chairman of the Federal Communications Commission, said both companies had promised his agency they would offer a next-generation 5G network to 99 percent of Americans within six years of completing the deal while also expanding access to mobile broadband.

Sprint shares initially surged 23.2% while T-Mobile shares rose 5.1%, but both pared gains to a rise of 14% and 2.8% respectively after a report from Bloomberg News said the Department of Justice, which also has to OK the deal, was leaning against approval.

The two companies also promised a rapid build out of its 5G network, seeking to cover at least two-thirds of the USA population with download speeds that exceed 100 megabits per second.

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So what happens if the New T-Mobile fails to deliver on any of the obligations outlined here?

The sale of Boost is aimed at resolving concerns that the deal would give the combined company 54% of the prepaid market, which generally includes those with poor credit who can not pay with a credit card.

The Obama administration rebuffed the companies' earlier effort to merge, as well as an attempted deal between AT&T and T-Mobile, on concerns that such deals would hurt competition in the wireless industry. The commitments made today by T-Mobile and Sprint would substantially advance each of these critical objectives.

Pai said Monday that the combination will help bring faster mobile broadband to rural Americans. "First, he hasn't done ONE thing that goes against the interests of the biggest mobile carriers".

For the past four years, T-Mobile and Sprint have been trying to merge together.

T-Mobile and Sprint must commit to building out 5G over the next three years. "The supposed three-year price freeze is meaningless in a wireless market where prices are falling and likely would continue to drop in the absence of this merger", advocacy group Free Press said today.

T-Mobile claims in six years' time, 90 percent of the US population will be able to get download speeds of at least 100Mbps on its network, and 99 percent will experience download speeds of at least 50Mbps. In their letter to the FCC, T-Mobile and Sprint say they'll agree to an "unprecedented" amount of verification and enforcement. "We've seen this kind of consolidation in airlines and with drug companies", she said.

Selling Sprint's pre-paid carrier Boost Mobile. The FCC is not requiring any spectrum divestitures from the carriers. Within six years of the merger closing, the companies said 90 percent of Americans could access such download speeds. "I have serious doubts". It is a straight up illegal merger", he tweeted, adding: "Any honest assessment of the market concentration numbers that come from a standard antitrust analysis and application of the Department of Justice's merger guidelines leaves you with one and only one actual conclusion.

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