The U.S Department of Justice this morning gave its approval for the merger of T-mobile and sprint for their proposed $26 billion mergers. This deal will bring together the nation’s 3rd and 4th largest carriers. The deal has got all the green signals with a condition that Sprint would sell its prepaid assets to Dish Network.
According to the deal, nine million prepaid subscribers will move to Dish. They will also get access to T-mobile /Sprinters network for seven years. For the last few months, the proposed merger was going through regulatory scrutiny as the deal will impact 95% of U.S mobile phone customers. Last month a group of attorney general lead by New York and California sued to block the deal stating limited competition will drive up prices for consumers.
New York attorney general Letitia James said in a statement “The promise made by Dish and T-Mobile in the deal are the kinds of promises only robust competition can guarantee. We have serious concerns that cobbling together the new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers and innovation.”
A spokesperson for California’s AG tells TechCrunch that the office is currently observing all these movements. The lawsuit, as it stands, could now present a hurdle for the deal as well.
Proponents of the deal still say that the merger will make a combined T-mobile/Sprint more competitive with category leaders Verizon and AT&T. Under the deal, T-mobile will have 80 million consumers in the U.S. making it a much closer third place to the around 100 million subscribers both top carriers currently have.
“With this merger and accompanying divestiture we’re expanding output significantly by ensuring larger amounts of currently unused or underused spectrum are made available for American consumers in the form of high-quality 5G networks,” DOJ antitrust chief Makan Delrahim stated The Wall Street Journal.