FCC head endorses T-Mobile, Sprint merger
The head of the Federal Communications Commission on Monday endorsed the $26 billion T-Mobile US Inc. merger with Sprint Corp., but the commission was not expected to immediately give the combination its official approval.
As FOX Business first reported last week, company officials met with regulators at the FCC to propose conditions to get the deal through, according to people with direct knowledge of the regulatory process.
Those concessions include a commitment to build out 5G in rural areas, not increase prices and divest at least of the companies' prepaid brands; prepaid brands are "pay as you go" and allow consumers to use phones without paying for annual contracts.
"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," FCC Chairman Ajit Paid said in a statement. "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.”
Shares of Sprint, which is being acquired by T-Mobile, rose 20 percent premarket.
|TMUS||T-MOBILE US INC.||144.84||+0.27||+0.19%|
These people tell FOX Business a decision could come as early as today but the situation is fluid. T-Mobile and Sprint officials are hopeful that their concessions have persuaded the FCC to approve the merger. The merger will still need approval from the Department of Justice Antitrust Division.
Company officials had no comment.
FCC and DOJ spokesmen had no comment.
The merger is facing some skepticism from regulators who are concerned reducing the number of major wireless carriers from four to three would harm consumers and substantially reduce competition. Company officials argued, however, that a combined T-Mobile and Sprint will be better able to compete against Verizon Wireless and AT&T Inc. on pricing. They also argued that it would be valuable for Sprint to join forces with T-Mobile—enabling the two to better compete against the Chinese in the development of 5G technology.
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If the FCC does approve the deal it would be unusual given that the DOJ Antitrust usually approves deals first — the companies feel an FCC sign off would signal DOJ approval since the two agencies are generally aligned in their decision making.