The Federal Communications Commission formally approved T-Mobile’s acquisition of Sprint on Tuesday, handing the two companies another victory as they seek to complete a $26 billion merger in the face of stiff opposition by more than a dozen state attorneys general and consumer advocacy groups.
The merger could prove transformative for the US wireless industry, which has witnessed cutthroat competition in recent years over everything from prices to customer contracts. As the nation’s third- and fourth-largest wireless carriers, T-Mobile (TMUS) and Sprint (S) have led the charge in ending early termination fees and reintroducing unlimited data plans. Now, as the two companies combine, the future of the marketplace is uncertain.
The FCC’s Republican majority praised the deal on Tuesday for its potential to accelerate the spread of high-tech 5G 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 in a statement.
The agency’s two dissenting Democrats were less optimistic. Commissioner Jessica Rosenworcel said the merger could mean the end of “a golden age in wireless,” while Commissioner Geoffrey Starks said the agency’s approval defied a staff analysis finding that wireless prices could go up after the merger, particularly for low-income urban Americans.
To help secure FCC approval, T-Mobile made a number of commitments to regulators. It has promised to spin off Sprint’s prepaid subsidiary, Boost Mobile, and build out high-speed wireless Internet to large swaths of the country.
But Starks said he found the conditions unpersuasive.
“I have little confidence that these commitments will protect competition and result in deployment of 5G services beyond what might have occurred in the absence of a merger,” he said in a statement.
Despite approval by the FCC and the Justice Department, the deal still faces roadblocks by a coalition of states that have sued to block the merger in federal court. That case is expected to go to trial next month. T-Mobile and Sprint have said they will not seek to close their merger unless the court rules in their favor.