In a move that was looking increasingly unlikely over the past few months, FCC Chairman Ajit Pai has signaled that he will recommend that Sprint/T-Mobile merger be approved. The $26.5B merger isn’t necessarily out of the woods yet as no vote has been taken and the other four commissioners have not been heard from yet and there is still the DOJ to persuade. But nevertheless, the deal has crossed a threshold and may now be back on track to close in the coming months.
In order to get past the FCC’s concerns, Sprint and T-Mobile had to make a few concessions. The Boost prepaid business will be sold off, a 5G network will be built out over 3 years, and pricing will not be raised during that construction. Promises were made to ensure ‘robust’ infrastructure in rural areas and to work on in-home broadband offerings.
The markets liked the move, and all four US wireless giants saw their stocks surge in response, Sprint and T-Mobile for obvious reasons and Verizon and AT&T due to the prospect of a reduction in competition overall. Infrastructure providers, however, saw the opposite given the consolidation synergies that will inevitably come at their expense.
The news comes just over a year since the deal was announced after years of dancing. I think we’re all tired of the dance at this point. I wonder though if a tweet will send things the other way in the next 24 hours.
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Categories: Government Regulations · Mergers and Acquisitions · Wireless
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Divesting BoostMobile isn’t going to solve anyone’s fears. It’s just someone else for the combined entity to hike MVNO rates on.