5G M&A

FCC chairman endorses $26 billion T-Mobile and Sprint merger

Chairman of the Federal Communications Commission (FCC), Ajit Pai, has announced his endorsement for the $26 billion T-Mobile and Sprint merger.

Officials from the two telecommunication carriers have been in talks with regulators at the FCC about conditions that would allow the deal to go through. Conditions that have been discussed include the roll-out of 5G in rural areas throughout the U.S. and not to increase prices on their pre-paid packages.

The companies agreed conditions of the roll-out of 5G infrastructure include population coverage of 97% of the U.S. within three years and 99% within six years, with 85% of the initial 97% being in rural areas of the U.S. Failure to meet the terms of the deal could lead to substantial fines.

While announcing his support Ajit Pai added in his statement, “This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity.” He continued, “The significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it.”

With the FCC likely to approve the merger, the deal is currently under review by the U.S. Department of Justice, where they are investigating whether a merger between T-Mobile and Sprint violates antitrust law.

If the merger of T-Mobile and Spring is successful, this will decrease the number of significant US wireless carriers from four to three, with competition from just Verizon and AT&T.

Pai’s endorsement of the merger comes after Trump issued an executive order paving way for a ban on U.S. companies using any telecoms equipment manufactured by Huawei, citing security concerns. Huawei has been a major supplier to U.S. rural broadband carriers, and it is thought a ban on Huawei equipment could significantly hinder the progress of rolling-out 5G technology in the U.S.