T-Mobile, Sprint Merger Finally Gets FCC Approval

The latest news on the $26.5 billion Sprint T Mobile merger plan is that the Federal Communications Commission (FCC) has given its formal approval to the deal on Wednesday.

But it was not a unanimous nod and votes were split along party lines, according to Reuters that quoted insider sources.

The merger plan between the third and fourth-largest U.S. wireless carriers had been facing a struggle to win government approval since April 2018.

Among those voted in favor of the merger deal included Chairman Ajit Pai, two Republican commissioners Brendan Carr and Michael O'Reilly while two Democratic commissioners opposed the deal.

But the release of the approval order will come only by late October.

Later Democratic Commissioner Jessica Rosenworce went public with her reservations against the wireless company’s merger in an article to The Atlantic and argued that market concentrations always end up squeezing customers.

Rosenworce alleged both the FCC and the DOJ succumbed to “a few unenforceable concessions and hollow promises” by T-Mobile and Sprint.

The merger deal has already won the nod of the U.S. Justice Department (DOJ) in July. The top two players in the wireless market are AT&T and Verizon.

Republicans are mostly pro-deal as they hope the T-Mobile Sprint union could kick in a faster 5G network rollout.

However, the deal faces the hurdle of a legal challenge by 16 states run by Democrats. The lawsuits of states led by New York will go on trial from the first week of December.

The states are targeting Sprint, parent company Softbank Group and T-Mobile, its parent Deutsche Telekom, alleging the deal will escalate prices and hurt consumers.

DOJ terms for the merger

The DOJ had set certain conditions to approve the deal, under which the merging companies have to divest Sprint’s prepaid businesses, including Boost Mobile to Dish Network for $5 billion.

This will facilitate Dish to emerge as the new player in the wireless market to compete with Verizon wireless and others. Dish Network is expected to offer 20,000 cell sites and hundreds of retail locations.

Both the merging companies have also promised they will not hike prices for three years and ensure better customer service on the lines of T-Mobile customer care and Sprint customer care.

FCC to decide on C-Band spectrum deal

Meanwhile, The C-Band Alliance (CBA) comprising three major satellite operators Intelsat, SES, and Telesat of Canada are looking to divest at least 180 MHz of their satellite spectrum to help the roll-out of 5G technology in the U.S.

They have offered to sell spectrum to FCC. According to Morgan Stanley, the spectrum deal could be priced around $30 billion.

Indications from an FCC filing on Oct 4 suggested a decision on the CBA’s proposals may come in November.

According to Sami Kassab, an equity analyst at BNPP the FCC filing suggested the C-band proposal is on track and the satellite operators want to monetize their C-band spectrum rights.