Federal Communications Commission Chairman Ajit Pai said Monday he supported the deal because the two companies promised to expand mobile internet access in rural areas and roll out 5G, the next generation of mobile networks. Within six years of the merger closing, the companies said 90 percent of Americans could access such download speeds. "We should seize this opportunity".
Metro and Virgin would remain part of the New T-Mobile under this plan. Some would argue that combining the rapidly growing T-Mobile with Sprint will produce a new mobile powerhouse that would put more pressure on Verizon and AT&T than if the deal was rejected.
A sign for a T-Mobile store is seen in Manhattan, New York, U.S., April 30, 2018.
The combined company's more sizeable scale would help it rival USA giants AT&T and Verizon Communications, which dominate the United States market.
Selling Sprint's pre-paid carrier Boost Mobile.
One of the main promises the two companies used to gain approval of their merger was that they would be able to offer new, super-fast 5G wireless services in more places, more quickly.
Pai also noted that both Sprint and T-Mobile have made concessions to assuage regulatory concerns, including a commitment to not raise wireless fees for three years and to divest themselves of prepaid wireless brand Boost Mobile to give consumers another competitive option. The companies made deploying 5G their key promise in the merger, even though all four major carriers were going to do that anyway.
The combined company plans to deliver internet service to homes that compete against existing internet providers on price. Furthermore, T-Mobile and Sprint promise that 90 percent of Americans will have access to mobile broadband service at speeds of at least 100 Mbps and 99 percent will have access to speeds of at least 50 Mbps.
In another nod to rural users, the merged company will be available to 300,000 more rural households within three years than originally promised.
John Legere, chief executive of T-Mobile, cheered Pai's endorsement. Of that total, at least 2.6 million households will be in rural areas.
Sohn also noted that by highlighting the three-year price freeze as a reason for approving the merger Pai was "putting himself in the position of a price regulator" - something that he had previously - and caustically - said is not the job of the FCC.
The one major new condition imposed by the FCC and agreed upon by the carriers is the sale of Boost Mobile, now a Sprint subsidiary. What happens then to Boost's rates is anybody's guess. "Failure to meet New T-Mobile obligations will trigger severe, increasing, and continuing voluntary contributions that will make failure prohibitively expensive and incentivize New T-Mobile to meet its commitments", the companies said. This came after the companies agreed to various concessions, including a pledge to not raise prices for three years. T-Mobile plans to use the 600MHz spectrum on LTE Band 71 for this effort.
Under the revised terms of the merger submitted with the FCC, the companies would "suffer serious consequences" - including billions of dollars in financial penalties - "if they fail to follow through on their commitments to the FCC", according to Pai.
While the upgrade from 4G to 5G will bring speed improvements, T-Mobile recently said the biggest speed increases will only come to "small pockets of 5G hotspots in dense urban environments".
We'll find out soon enough whether the Justice Department has reached a different conclusion.