The FCC voted to approve the merger of T-Mobile and Sprint with the following commitments from the new T-Mobile:
- Within three years, the company will deploy 5G service to cover 97% of the American people, and within six years to reach 99% of all Americans. This commitment includes deploying 5G service to cover 85% of rural Americans within three years and 90% of rural Americans within six years.
- Within six years, 90% of Americans would have access to mobile service with speeds of at least 100 Mbps and 99% of Americans would have access to speeds
- of at least 50 Mbps. This includes two-thirds of rural Americans having access to mobile service with speeds of at least 100 Mbps, and 90% of rural Americans having access to speeds of at least 50 Mbps.
The FCC ruled that the merger would not harm competition and that the transaction is in the public interest.
In connection with the merger, the FCC also proposed modifications to construction deadlines related to DISH licenses and the Department of Justice’s consent decree, where DISH pledged to become a new entrant into the wireless industry. DISH has committed to offering 5G to over two-thirds of Americans within four years.
FCC Commissioner Ajit Pai stated “New T-Mobile will be far better positioned to deploy Sprint’s extensive 2.5 GHz spectrum
holdings than would Sprint standing alone, given that company’s financial situation. Indeed, New TMobile’s network will cover at least 88% of Americans with mid-band 5G within six years, a far wider
deployment than either Sprint or T-Mobile would be able to accomplish on their own.”
New T-Mobile to provide network access to DISH for 7 years
The U.S. Department of Justice (DOJ) approved the merger of T-Mobile US and Sprint with the following conditions: Sprint’s prepaid businesses and Sprint’s 800 MHz spectrum assets be divested to DISH. Sprint and T-Mobile must also provide DISH wireless customers access to the New T-Mobile network for seven years and offer standard transition services arrangements to DISH during a transition period of up to three years. DISH will also have an option to take on leases for certain cell sites and retail locations that are decommissioned by the New T-Mobile, subject to any assignment restrictions.
The T-Mobile + Sprint deal was first announced on 29-April-2019. Deutsche Telekom holds approximately 62% stake in T-Mobile US. Softbank holds an 83% stake in Sprint.
“The T-Mobile and Sprint merger we announced last April will create a bigger and bolder competitor than ever before – one that will deliver the most transformative 5G network in the country, lower prices, better quality, unmatched value and thousands of jobs, while unlocking an unprecedented $43B net present value in synergies. We are pleased that our previously announced target synergies, profitability and long-term cash generation have not changed,” said T-Mobile CEO and New T-Mobile CEO John Legere.
“This is an important day for our country and, most important, American consumers and businesses,” said Sprint Executive Chairman Marcelo Claure. “Today’s clearance from the DOJ, along with our anticipated approval from the FCC, will allow the U.S. to fiercely compete for 5G leadership. We plan to build one of the world’s most advanced 5G networks, which will massively revolutionize the way consumers and businesses use their connected devices to enhance their daily lives. The powerful combination of 5G, artificial intelligence and the Internet of Things will unleash endless possibilities.”
https://www.t-mobile.com/news/t-mobile-sprint-merger-doj-clearance
New T-Mobile and DISH Agreements that become effective upon completion of the T-Mobile+Sprint merger
Agreement to Divest Sprint’s Prepaid Businesses
The New T-Mobile will be committed to divest Sprint’s entire prepaid businesses including Boost Mobile, Virgin Mobile and Sprint-branded prepaid customers (excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Telecommunications Company and Swiftel Communications, Inc.), to DISH for approximately $1.4 billion. These brands serve approximately 9.3 million customers in total.
Agreements Upon Closing of Prepaid Divestiture
Master Services Agreement for Network Access
Boost Mobile, Virgin Mobile, and Sprint-branded prepaid customers, as well as new DISH wireless customers, will have full access to the legacy Sprint network and the New T-Mobile network in a phased approach. Access to the New T-Mobile network will be through an MVNO arrangement, as well as through an Infrastructure MNO arrangement enabling roaming in certain areas until DISH’s 5G network is built out.
Transition Services Agreement to Support Prepaid Customers
The New T-Mobile will offer standard transition services arrangements to DISH for up to three years following the close of the divestiture transaction. The transition services provided by the New T-Mobile will result in the orderly transfer of prepaid customers to DISH and will also ensure the continued and seamless operation of Boost Mobile, Virgin Mobile, and Sprint-branded prepaid businesses following transition to DISH’s ownership.
Agreement to Divest Sprint’s 800 MHz Spectrum Licenses to DISH
DISH has agreed to acquire Sprint’s portfolio of nationwide 800 MHz spectrum for a total value of approximately $3.6 billion in a transaction to be completed, subject to certain additional closing conditions, following an application for FCC approval to be filed three years following the closing of T-Mobile’s merger with Sprint. This will permit the New T-Mobile to continue to serve legacy Sprint customers during network integration, pending later FCC approval of the license transfer. The companies have also entered into an agreement providing the New T-Mobile the option to lease back a portion of the spectrum sold to DISH for an additional two years following closing of the spectrum sale.
Option for DISH to Take Over Decommissioned Cell Sites and Retail Locations
Following the closing of T-Mobile’s merger with Sprint and subsequent integration into the New T-Mobile, DISH will have the option to take on leases for certain cell sites and retail locations that are decommissioned by the New T-Mobile for five years following the closing of the divestiture transaction, subject to any assignment restrictions.
Agreement to Engage in Negotiations Regarding T-Mobile Leasing DISH’s 600 MHz Spectrum
The companies have also committed to engage in good faith negotiations regarding the leasing of some or all of DISH’s 600 MHz spectrum to T-Mobile.
