FCC approval makes T-Mobile/Sprint merger almost a done deal

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FCC chairman Ajit Pai isn’t down with China Mobile coming to the United States.
FCC Chairman Ajit Pai openly supports the big T-Mobile/Sprint merger.
Photo: Gage Skidmore/Flickr CC

The Federal Communications Commission reportedly will grant approval for the multibillion-dollar merger of T-Mobile and Sprint. This is one of the last hurdles before the third- and fourth-largest U.S. carriers can blend into a single entity almost as large as AT&T and Verizon.

The FCC vote did not officially announce the vote yet. However, the result leaked to Reuters. FCC Chairman Ajit Pai already went on record supporting the megamerger. His two fellow Republican commissioners reportedly voted with him, while both Democrats on the commission opposed the deal.

Since announcing their $26 billion merger, T-Mobile and Sprint argued that each of them alone is too small to create a 5G infrastructure capable of competing with their larger rivals.

T-Mobile/Sprint merger tied up in the courts

The Department of Justice approved the merger of Sprint and T-Mobile back in July. So FCC approval would likely mean the deal moved ahead. There’s just one problem. No fewer than 18 state attorneys general already filed a lawsuit to block it.

Documents filed in the suit argue that reducing the number of nationwide U.S. carriers from four to three will result in increased costs of phone service for everyone. The deal also likely would lead to significant layoffs at T-Mobile’s and Sprint’s retail stores, according to the suit.

Meanwhile, the two carriers argue that cost savings from combining their 5G efforts will let them offer the high-speed service at lower prices. They also promise that their merged company will employ more people than each did separately.

If the T-Mobile/Sprint merger clears this last hurdle, the combination will be called New T-Mobile. John Legere, T-Mobile’s colorful CEO, will head the new company. Based on current figures, New T-Mobile would serve a customer base nearly the size of AT&T’s, but not as large as Verizon’s.