Anyone who follows the wireless space at all has likely been reading about this T-Mobile and Sprint merger for months. For a long time it looked as though the merger might not be approved, now most think it will happen but even that is not certain. There are three events that had to happen for the merge to be successful: DOJ approval, FCC approval and judicial approval.
The U.S. Department of Justice was the first major hurdle that the merger needed to pass. The DOJ’s main concern is that the merger would bring the number of major carriers in the country down to three. Having so few companies controlling such an important part of the market flirts with monopoly territory—a big problem for the average consumer. To avoid that, the DOJ approved the merger as long as major wireless assets from T-Mobile and Sprint were sold to DISH Network. That way DISH would step in and become the fourth major carrier in the country.
With the DOJ approval secured, those working for the success of the merger set their sites on the FCC. The Federal Communications Commision finally gave its approval of the merger in early November of 2019.
According to the FCC, “T-Mobile and Sprint have committed within three years to deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans. This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.”
In addition to the buildout conditions set by the FCC, the federal agency also laid out speed conditions that the company must meet. Specifically, T-Mobile and Sprint must make 100 Mbps speeds available to 90% of Americans. A minimum of 50 Mbps must be available to 99% within six years. Additionally, two thirds of rural residents must have access to 100 Mbps and 90% 50 Mbps.
Naturally, the FCC has also committed to enforcing these requirements. The agency will utilize a third-party service to oversee these requirements and has instituted a slew of stiff fines should T-Mobile and Sprint not deliver on the agreed upon conditions. How stiff? T-Mobile and Sprint will face fines of around $2 billion if they don’t meet the outlined conditions.
T-Mobile and Sprint have one last roadblock to get past before their merger can be finalized. Unfortunately, this final hurdle may be the greatest one yet. Several states attorneys general banded together and filed a lawsuit against the merger. While some states have since been convinced to withdraw their suit, many still are determined to take this issue all the way to the courts. Until a judge gives a ruling, the state of the merger will remain in flux.
A finalized merger between Sprint and T-Mobile will have a drastic effect on the entire wireless industry. Current experts tend to be in agreement that the merger will be finalized eventually, but until that actually occurs anything can happen.