FCC Chairman Pai endorses Sprint/T-Mobile merger with rural 5G conditions

Federal Communications Commission Chairman Ajit Pai Monday morning endorsed the proposed $26.5 billion merger between Sprint and T-Mobile, though commissioners haven't officially approved the deal yet. Sprint shares jumped 25% and T-Mobile shares grew 5.4% in early morning trading at the news.


The endorsement comes after executives from the two wireless carriers met with FCC members last week to offer more concessions in a bid for approval. Sprint and T-Mobile committed to not raise prices, to sell off Sprint’s Boost Mobile brand, and to build out 5G in rural areas within three years of closing the merger, according to a report from Bloomberg.


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In a statement, Pai said T-Mobile and Sprint committed to build out 5G networks covering 85% of rural Americans within three years and covering 90% within six years.


“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,” Pai said. “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.”


The merger has faced opposition from wireless groups and some state attorneys general. Wireless industry opponents that have formed the 4Competition Coalition say that merger would lead to price increases for virtually all wireless customers, substantially raise wholesale rates and cause significant job losses, all while failing to deliver on promises to expand rural coverage.


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Bloomberg reported that the prepaid business divestiture may help ease concerns presented from some state attorneys general that the merger would negatively impact low-income consumers by removing choices and raising prices.


T-Mobile announced the two companies extended the deadline for completion of the merger to July 29. The FCC is expected to draft the order by June. However, the deal will still require approval from the U.S. Department of Justice’s Antitrust Division before being completed.