T-Mobile and Sprint commit to 5G buildout and divesting Boost Mobile, FCC Chairman recommends deal be approved
This week is beginning with some big news regarding T-Mobile and Sprint’s merger.
T-Mobile today confirmed that it’s made a few commitments to the FCC with relation to its merger. Those include mobile 5G and home broadband deployments, the promise to divest Boost Mobile, a commitment to not raise prices. When it comes to 5G, T-Mo says it will cover 97 percent of the U.S. population with 5G on low-band spectrum and 75 percent of the population with 5G on mid-band spectrum within three years of the merger’s close. This will result is nearly two-thirds of Americans getting speeds of 100Mbps or higher, says T-Mo.
Another commitment from T-Mobile is that it will cover 85 percent of rural America waith 5G on low-band spectrum within three years of the merger’s close, with that number growing to 90 percent in six years. The carrier adds that it intends to get speeds of 100Mbps or higher to 99 percent of the U.S. population in six years and 50Mbps or higher to 99 percent of the population, and it says that it plans to verify those speeds with drive tests.
When it comes to in-home broadband, T-Mobile has committed to market its service to 9.6 million eligible households, at least 2.6 million of which will be rural within three years of the merger’s close. 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.
T-Mobile also pledged to sell off Sprint’s Boost Mobile prepaid business if its merger is approved. T-Mo says it will find a “serious, credible, financially capable and independent buyer” and that the new Boost will have “attractive wholesale arrangements” that include a six-year wholesale MVNO agreement. T-Mobile plans to find a buyer for Boost and submit a new MVNO agreement to the FCC within 120 days of the merger’s close, subject to two 30-day extensions.
Finally, T-Mobile has reitereated its commitment to pricing post-merger. The new T-Mobile will offer “the same or better rate plans at the same or better prices for three years”, including 5G.
T-Mobile says it will submit annual reports regarding its progress in meeting its 5G and in-home broadband rollouts. For its three-year and six-year commitments, T-Mo plans to put together a report that includes data from drive tests, polygon coverage shapefiles, population and household coverage figures, site lists, marketing figures, and executive certifications.
In response to T-Mobile and Sprint’s commitments, FCC Chairman Ajit Pai has recommended that it be approved by the FCC:
“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. 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.”
FCC Commissioner Brendan Carr also announced his support of the merger. “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 Commissioner Jessica Rosenworcel isn’t quite as keen on the deal. “We’ve seen this kind of consolidation in airlines and with drug companies. It hasn’t worked out well for consumers,” Comissioner Rosenworcel tweeted today. “But now the FCC wants to bless the same kind of consolidation for wireless carriers. I have serious doubts.”
Getting support for the merger from the FCC Chairman is a big deal for T-Mobile and Sprint, but the deal isn’t done quite yet. The Department of Justice is still reviewing the merger, and DOJ antitrust chief Makan Delrahim recently said that he hadn’t made up his mind on the deal.
UPDATE: FCC Commissioner Mike O’Rielly has come out in support of the T-Mobile-Sprint merger:
While I generally withhold all comments regarding pending or prospective mergers, I find it necessary to clarify, at this time, that I am inclined to support T-Mobile/Sprint proposed merger, even if not convinced of the need for all the newly announced conditions being proposed.
— Mike O’Rielly (@mikeofcc) May 20, 2019
Sources: T-Mobile, New T-Mobile, FCC