Sprint T-Mobile Merger

Sprint and T-Mobile promised to offer better prices than those currently offered by T-Mobile or Sprint for three years following the deal’s closing. — Justin Sullivan/Getty Images

Sprint and T-Mobile have been trying to get married for years. They just got a step closer.

The companies announced Monday that they have adjusted their merger terms to address concerns brought to them by the FCC. The regulator and the U.S. Department of Justice both have to approve the deal before the companies can complete their merger.

FCC Chairman Ajit Pai on Monday announced that he now believes the deal is in the best interest of American consumers, and he’ll recommend that the FCC approve the merger.

“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,” Pai said in a statement. “We should seize this opportunity.”

Sprint’s stock soared 24% Monday. T-Mobile’s stock was up 5%.

The companies agreed to certain coverage commitments, including 100 megabit-per-second download speeds (equivalent to fast home broadband speeds) accessible to about 66% of Americans within three years of the deal’s closing. The companies pledged to build a 5G network within six years following the merger. That network will, they promised, also include coverage for some rural Americans, and they said the new company will offer an in-home broadband product.

Sprint will divest its low-cost Boost Mobile wireless company, and that new company will promise to offer better prices than those currently offered by T-Mobile or Sprint for three years following the deal’s closing. The companies agreed to pay the FCC up to $2.4 billion in fines if they violate the agreement.

Until Monday, the merger was widely believed to be dead. The Wall Street Journal reported last month that the Justice Department was unlikely to allow the companies’ proposed $26 billion merger to go forward as it had been constructed.

The Journal reported that Justice Department antitrust officials are concerned about the impact the merger would have on competition in the wireless industry. The companies’ stocks had since tumbled.

It’s unclear if the revised terms will win over the Justice Department, which will still have to approve the merger even if the FCC signs off. Although the FCC and Justice Department usually act in concert, they don’t always agree.

T-Mobile CEO John Legere and Marcelo Claure, executive chairman of Sprint’s board, disputed the Wall Street Journal’s article in April.

The Department of Justice declined to comment. In December, Sprint and T-Mobile received approval from the Committee on Foreign Investment in the United States, a government panel that vets certain deals involving foreign investors.

{span class=”print_trim”}At the time, the wireless operators also said the U.S. Departments of Justice, Homeland Security and Defense had withdrawn an earlier request to delay the deal. That decision, however, pertained to potential national security, law enforcement and public safety issues — not antitrust concerns. — (CNN)

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