Shares of both Sprint and T-Mobile jumped after the news broke, with Sprint soaring over 26% to $7.79 in premarket trading and T-Mobile rising almost 6% to $79.85.
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. Now, more than any time previously, it looks like the T-Mobile Sprint merger could actually happen. Sprint has a huge amount of spectrum licensed in the 2.5 GHz band, flawless for 5G, but lacks the financial wherewithal on its own to build a 5G network in much of the country. Within six years of the merger closing, T-Mobile intends to market its in-home broadband to 28 million eligible households, 5.6 million of which will be rural.
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 little bit of price competition people have enjoyed thanks to the rivalry between Sprint and T-Mobile could keep sending prices lower. Does anyone really believe that this FCC, which has asked nothing of the big mobile companies for over two years, will require the companies to abide by these commitments?"
Today T-Mobile and Sprint announced several changes to their $26 billion merger deal.
T-Mobile and Sprint first announced their plans to merge in April 2018, looking to combine forces to take on the two industry leaders - AT&T and Verizon.
Selling Sprint's pre-paid carrier Boost Mobile. FCC officials said they believed that it could be easily and quickly upgraded to 2.5 GHz 5G. This also comes with speed requirements: the carriers have guaranteed that 90 percent of Americans will have access to mobile broadband speeds of at least 100Mbps, and 99 percent will have access to speeds of at least 50Mbps.
T-Mobile already provides average download speeds of 21.1Mbps, while Sprint's network offers an average of 13.9Mbps, according to OpenSignal data based on customer speed tests nationwide. The speed gains will come largely from mid-band spectrum. According to a statement released on May 20, FCC Chairman Ajit Pai will recommend that the merger between the two US carriers is approved. 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. "I support the combination of T-Mobile and Sprint because Americans across the country will see more competition and an accelerated buildout of fast, 5G services", Commissioner Carr explained, adding that the deal's commitments are "verifiable and enforceable" and that T-Mobile's commitment to rural 5G "will help close the digital divide".
FCC Democrat Jessica Rosenworcel disagreed.
"We've seen this kind of consolidation in airlines and with drug companies", she wrote.
Gigi Sohn, a public interest lawyer who worked as a counselor to former FCC Chairman Tom Wheeler under President Obama, said the deal is "still anticompetitive and anti-consumer".