The biggest obstacle to the merger is now cleared, but the approval of the California Public Utilities Commission is still pending.
Background: T-Mobile and Sprint announced plans to merge in June 2018. The two operators made commitments to facilitate the approval, including not to raise prices for three years, to divest Boost Mobile (one of Sprint’s prepaid wireless brands), and to build a 5G network to cover 97% of the US within three years (85% of the rural population), and 99% of Americans within six years (90% of the rural population). They also committed to rollout a 5G home product as an alternative to fixed broadband. The Department of Justice, which approves mergers on antitrust grounds, gave the green light in July 2019. It required the merged entity to sell Boost Mobile, Virgin Mobile, and Sprint Prepaid to Dish (which will also gain some of Sprint’s spectrum and become a fourth MNO). T-Mobile and Sprint would also have to open up more than 20,000 cell sites and dozens of retail locations to Dish. T-Mobile also had to offer Dish "robust access" to its mobile network for seven years while the latter creates a 5G network of its own. In November 2019, the merger also gained the approval of the FCC on public interest grounds. However, the operators held off from its implementation while a legal challenge was pending, brought about by Attorney Generals of 18 US states.
The merger overcame the hurdle: On 11 February 2020, the District Court of Manhattan ruled in favour of the merger. The judge argued that “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”, and added that the deal would allow it to continue its successful business strategy. The judge also rejected the AGs’ argument that Sprint, without the deal, could continue competing, and noted that the DoJ’s remedy to establish Dish as a fourth MNO will bring further benefit to consumers.
All done then? Nearly. With today’s ruling, the biggest obstacle is believed to be cleared. However, the merger now needs to gain the approval of the California Public Utilities Commission to go ahead. The Commission repeatedly delayed the decision, which is now expected by 12 July 2020.
