Specifically, they agreed to divest Boost Mobile, a subsidiary of Sprint that offers pre-paid wireless service. In a statement, Pai said he was also swayed by their pledge to deliver 5G wireless and broadband service to the majority of Americans in the first few years of their merger.
“Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G,” Pai said, claiming the merger would “substantially advance each of these critical objectives.”
Shares of the two companies jumped following Pai’s announcement. FCC Commissioner Brendan Carr also formally announced his support for the merger Monday.
T-Mobile CEO John Legere said Monday marked a “very important step.”
?? We took a VERY important step in our proposed merger with Sprint today… and I couldn’t be more optimistic! We filed enforceable commitments with the FCC mapping out – in detail – what #NewTMobile will deliver. Key Info: https://t.co/Ioa23FUBQe
— John Legere (@JohnLegere) May 20, 2019
Critics of the merger are concerned that removing one of the four big wireless carriers in the U.S. will stifle competition and hurt consumers. The latest commitments from the companies are an effort to assuage those concerns. T-Mobile and Sprint have already pledged not to raise prices for the first three years following the merger.
For months, T-Mobile and Sprint have been pleading the case for the merger as a way to accelerate the deployment of 5G wireless technology in the U.S. to help it compete with other global superpowers, namely China.
Sprint and T-Mobile need approval from the FCC and Justice Department to complete their $26.5 billion merger. Pai’s support is a win for the two companies but they still face headwinds from the DOJ.
In April 2018, T-Mobile and Sprint agreed to merge and create a $146 billion company under the T-Mobile name. The companies plan to complete the merger this year if they receive regulatory approval. The combined company would operate under the T-Mobile brand, with its primary headquarters in Bellevue, Wash.