The pending $26 billion T-Mobile-Sprint merger cleared its last major regulatory hurdle Friday when the Justice Department approved the merger with some provisions including the sale of Sprint’s Boost Mobile prepaid carrier to Dish Network.
The combined T-Mobile-Sprint company must also sell Virgin Mobile and Sprint prepaid services to Dish, as well as some additional spectrum. T-Mobile and Sprint must provide Dish the cell sites needed to run its wireless service for seven years, while Dish builds its own 5G network, according to the agreement.
“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” assistant attorney general Makan Delrahim said in a statement Friday.
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The DOJ’s approval is the last major step for the merging of the nation’s No. 3 and No. 4 wireless carriers. Although the Federal Communications Commission needs to approve it, too, FCC chairman Ajit Pai gave his blessing to the corporate marriage two months ago.
T-Mobile CEO John Legere celebrated the agreement on Twitter saying: “We are one step closer to bringing New T-Mobile to American consumers!” His tweet linked to the company’s web site where it stated that the merger “open massive wireless highways and lower prices for ALL Americans.
“The Administration thinks it’s ok for two of the four major cell phone cos. to combine? This is a bad deal-it means less competition & more costs,” tweeted Sen. Amy Klobuchar, a Minnesota Democrat who is running for president and a member of the Senate Commerce Committee. “T-Mobile can’t compete for you for cheaper service against Sprint when they are the same company!”
Fourteen states including California and New York have sought to block the merger. A status hearing on that case is scheduled for Thursday in the Southern District of New York, but the states are asking for delay from the previously agreed upon Oct. 7 trial date due to changes in the merger, including DOJ provisions.
“Our antitrust laws protect Americans against the concentration of economic power in the hands of just a few. Choice is not real if competition is not meaningful,” California attorney general Xavier Becerra previously said.
The DOJ said five states – Nebraska, Kansas, Ohio, Oklahoma, and South Dakota had agreed with the agency on its merger provisions. Those states are not part of the other states’ legal challenge. “We’re reviewing the announced settlement, but our bottom line remains the same: protect consumers and competition,” Becerra said Friday.
At advocacy group Free Press, research director Derek Turner said the states have come to the same conclusion that the DOJ’s staff did previously: “This merger is bad for wireless users and can’t be fixed,” he said.
“By signing off on this merger, the Justice Department has done nothing to remedy the short- and long-term harms the loss of an independent Sprint will create for U.S. wireless users. Nothing about these divestitures would lower prices for customers,” he said. “DISH can’t mount a retail operation that’s even close to what Sprint currently offers. And the loss of competition would disproportionately harm low-income people and communities of color.”
As part of gaining FCC approval, T-Mobile and Sprint has also agreed to part with Boost Mobile, a Sprint-owned prepaid carrier that competes against Metro by T-Mobile.
The service, which you pay for in advance, prepaid segment – as the name suggests you pay in advance for cell service—is typically where you’ll find the cheapest prices, with Boost and Metro accounting for nearly half the market.
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.