Wireless carriers T-Mobile and Sprint moved a step closer to merging, winning the approval of the Federal Communications Commission for their $26 billion tie-up Photo: AFP/File

U.S. telecom regulator approves T-Mobile/Sprint merger

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By Rob Lever

The U.S. telecom regulator on Tuesday approved the merger of T-Mobile and Sprint, moving the tie-up of the third- and fourth-largest U.S. carriers closer to completion.

The Federal Communications Commission cleared the $26 billion deal three months after approval by antitrust officials at the U.S. Justice Department.

The 3-2 FCC vote is conditioned on the divestment by Sprint of its prepaid division Boost Mobile to the satellite broadcast group Dish, which will begin building a new national wireless network.

Backers of the deal say combining T-Mobile and Sprint will create a strong number three U.S. wireless carrier behind Verizon and AT&T, with the resources to invest in 5G, or fifth-generation, networks.

"The transaction will help secure United States leadership in 5G, close the digital divide in rural America, and enhance competition in the broadband market," said FCC chairman Ajit Pai.

Critics claim, however, it will reduce choices for American consumers and ultimately lead to higher prices.

Voting against the deal, FCC commissioner Jessica Rosenworcel said it will result in three firms controlling 99 percent of the wireless market.

"By any metric, this transaction will raise prices, lower quality, and slow innovation, just as we start to deploy the next generation of wireless technology," she said in a statement. "We've all seen what happens when market concentration increases following a merger."

Pai maintained that in a dynamic market, a decision should not be based on "a simplistic, backward-looking claim that doesn’t capture the reality of today or tomorrow."

He also noted that in some areas of the country, the number of carriers would increase from two to three.

The companies have said they would not finalize the deal until an antitrust challenge from more than a dozen states is resolved. They anticipate a closing sometime next year.

The FCC said T-Mobile and Sprint have committed to deploy 5G service to cover 97 percent of U.S. customers within three years, and 99 percent within six years.

Dish Network, which operates satellite and other pay TV systems, has pledged to deploy a 5G broadband network capable of serving 70 percent of the US population by June 2023.

Dish will get wireless spectrum to be divested in the deal as well as the prepaid Sprint operations and will also use some of the wireless capacity of T-Mobile and Sprint.

Phillip Berenbroick of the consumer group Public Knowledge said regulators from the FCC and Justice Department used tortured logic in approving the deal while seeking to create a viable fourth carrier to preserve competition in the market.

"Instead of simply rejecting the deal and betting on competition to benefit consumers, the DOJ and the Commission imposed convoluted behavioral conditions that are ultimately unlikely to remedy the identified harms," Berenbroick said in a statement.

"That outcome would leave consumers to bear the consequences."

The merger announced in April 2018 would bring together T-Mobile, controlled by Germany's Deutsche Telekom, and Sprint -- a subsidiary of Japan's SoftBank -- with more than 100 million customers.

Under the plan, T-Mobile chief executive John Legere would hold that role at the combined company.

© 2019 AFP

©2019 GPlusMedia Inc.

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In any nationwide industry, if there aren't at least 10 competitors, no mergers should be allowed.

I've worked for 2 telecom companies and been a customer to both Spring and T-Mobile. Sprint had very clear connections, but very little coverage. If a GSM device received a call while I was using my Sprint phone nearby, my call would be dropped due to GSM interference.

T-Mobile has more coverage and with modern technology, the voice quality is the same across all the networks, but T-mobile refuses to connect in places their marketing coverage maps claim to have service ... like Alaska and the OBX areas. False advertising is very common from that company.

If either company needs to fail, great. Their assets can be bought.

I've been through a number of corporate mergers in my career. My advice to anyone left after a merger - leave. Get another job ASAP, assuming your stock options all immediately vest.

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