US approves $26bn T-Mobile-Sprint merger

Settlement put together by DoJ would see a weak fourth player owned by Dish Network - but it will take years for it to build its own infrastructure, if it ever does

Competition in the US mobile market is set to get even slimmer following Department of Justice (DoJ) approval of the $26 billion merger between T-Mobile and Sprint. The two companies are the third and fourth-largest mobile operators in the US, respectively.

However, one minor caveat of the deal is that Sprint will be required to divest its Virgin Media and Boost Mobile MVNOs to satellite television operator Dish Network.

These are intended to form the nucleus of a fourth, somewhat weak, player in the US mobile communications sector, with the newly merged company obliged to let Dish use its mobile assets to continue operating as an MVNO while it builds its own physical assets.

The merged company has also pledged to roll-out 5G to cover "99 per cent of the American people", according to Federal Communications Commission chairman Ajit Pai,

The terms announced by the DoJ continued: "The proposed settlement also provides for the divestiture of certain spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites and hundreds of retail locations. T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years, while Dish builds out its own 5G network."

T-Mobile CEO John Legere will become CEO of the merged organisation. In a conference call, he denied widely aired claims that the merger would lead to even higher prices.

"It's a bit dumbfounding to think that we've decided to go and build this network and go through this merger so that we can become the basic, lazy, fat, dumb and arrogant players that we were born to teach how to behave."

The deal received the support of the FCC head Ajit Pai back in May.

However, opposition to the deal means that a legal challenge led by the states will continue. While five have signed-up to the DoJ settlement, some 13 have not. These include the state of New York, whose attorney general Letitia James has already pledged to continue legal action to stop the merger going through.

"We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger's harm to consumers, workers, and innovation," James said in a statement.

The US government fears that it has fallen behind in 5G, despite claims by Verizon that it was one of the first mobile operators in the world to switch-on its 5G network. It believes that consolidation will enable big players to more easily finance infrastracture build out.

In the UK, Vodafone became the first network to switch-on its 5G network in early July. While only initially available in parts of London, Manchester, Birmingham, Glasgow, Bristol, Cardiff and Liverpool at launch, it plans to take it to 12 more conurbations before the end of the year.