The T-Mobile Sprint merger could close as soon as April, now that a federal judge has sided with the carriers in a court case brought by the attorneys general of several states attempting to block the merger.
The merger “remains subject to certain closing conditions, including possible additional court proceedings, and satisfactory resolution of outstanding business issues among the parties,” the merger partners said in a press release.
The states could still appeal the ruling, and another U.S. district judge in Washington reportedly must approve an existing Department of Justice plan for the merger partners. An approval from the California Public Utilities Commission also remains pending.
Whenever the deal may close, it will create a strong competitor to the nation’s two largest wireless carriers AT&T and Verizon. T-Mobile already had made significant gains against those companies, and the Sprint acquisition would include a valuable spectrum portfolio, including major mid-band spectrum holdings, which some see providing the best mixture of bandwidth and range for 5G services. The companies also have pledged to make major fixed wireless deployments.
While the Department of Justice initially was concerned that the merger would reduce the number of nationwide carriers from four to three, the merger partners were able to assuage those concerns with a plan to sell Sprint’s prepaid business and a portion of Sprint’s spectrum to Dish Network, which has pledged to deploy a 5G network covering 70% of the U.S. population by 2023.
T-Mobile Sprint Court Case
A press release from T-Mobile and Sprint quotes the court’s decision: “T-Mobile has redefined itself over the past decade as a maverick that has spurred the two largest players in its industry to make numerous pro-consumer changes. The proposed merger would allow the merged company to continue T-Mobile’s undeniably successful business strategy for the foreseeable future.”
T-Mobile and Sprint announced merger plans in 2018. Since then, the companies have agreed to several key merger conditions. To get DOJ approval, which came in July 2019, the companies agreed to the Sprint asset sale to Dish. FCC approval officially came in November 2019, although FCC Chairman Ajit Pai earlier last year had signaled that the commission would approve the merger with certain conditions.
FCC merger conditions required the merger partners to commit to deploying 5G service to cover 97% of the U.S. population within three years and 99% within six years. The partners also said that within six years, 90% of the overall population and two-thirds of the rural population would have access to mobile service supporting speeds of at least 100 Mbps. Within the same time frame, 99% of the overall population and 90% of the rural population would have access to speeds of at least 50 Mbps.
The merger partners use the term “the new T-Mobile” to reference the merged company, and the new T-Mobile should see its 5G wireless speeds increase as it deploys the Sprint mid-band spectrum.
And while some have questioned how strong a competitor Dish will really be, Dish CEO Charlie Ergen has been a strong evangelist for the company’s plans, with some industry observers saying he played a key role in enabling the Sprint T-Mobile court case win.
Dish faces major hurdles, including a lack of wireless experience, in meeting its 5G deployment conditions. But as Ergen has noted, Dish has surprised skeptics before, and he has committed to “again serve customers by disrupting incumbents and their legacy networks.”