T-Mobile, Sprint Merger Wins FCC Approval

The merger between T-Mobile and Sprint has officially received enough votes to win approval by the Federal Communications Commission (FCC).

Although Democrats Geoffrey Starks and Jessica Rosenworcel voted against the approval, three Republicans voted in favor of the merger, giving the deal final approval.

“Three of my colleagues agreed to this transaction months ago without having any legal, engineering, or economic analysis from the agency before us. Consumers deserve better from the Washington authorities charged with reviewing this transaction,” Rosenworcel said, according to Seeking Alpha.

Sprint and T-Mobile announced the $26 billion deal last year. The all-stock deal has T-Mobile exchanging 9.75 Sprint shares for each T-Mobile share. T-Mobile parent Deutsche Telekom will own 42 percent of the combined company — which will be known as T-Mobile — and Sprint parent SoftBank Group will own 27 percent. The remaining 31 percent will be held by the public.

The proposed merger has been highly scrutinized since it was first announced. Some analysts expressed concern about the lack of competition with only three large carriers, while those in favor of the deal said it could actually help the wireless market with adoption of 5G technology.

In addition, the U.S. Department of Justice previously said it wanted Sprint and T-Mobile to sell off assets before the merger could be approved. As a result, T-Mobile sold Dish, but will allow it to use the merged companies’ network for six or seven years before it builds its own. T-Mobile and Sprint also sold off assets including Sprint’s Boost, Sprint Prepaid and Virgin Mobile brands.

The merger still has to face a lawsuit filed in June by a group of U.S. state attorneys general in federal court in New York who argue that the proposed $26 billion deal would cost consumers more than $4.5 billion annually. In fact, they warned that consumer prices will jump due to the reduced competition.