The US Department of Justice has authorised the merger of Sprint and T-Mobile. With the deal of 26 billion dollars (about 23 billion euros) the companies hope to get a head start on the competition.

The merger was announced over a year ago. The Justice’s approval was delayed because the Ministry had concerns about the impact on the market, writes Silicon Angle. Critics argue that the merger reduces competition and increases prices for consumers.

In order to reduce the risk of this happening, the judiciary has made its approval subject to conditions. For example, Sprint has to sell part of its assets to Dish Network, which has to fill the competition’s space after the takeover.

Purchasing Dish Network

Specifically, Dish Network buys part of the spectrum in the 800 megahertz frequency that Sprint now owns. This is one of the frequencies that will be used for 5G as soon as the new mobile internet connection is rolled out.

In addition, Dish Network is taking over the prepaid business under the names Boost, Virgin Mobile and Sprint, as well as the 9.3 million associated subscribers and 20,000 cell sites. Dish Networks also pays a lot of money for all this. 1.4 billion dollars (approximately 1.26 billion euros) will be deposited for the prepaid business. For spectrum rights, this is $3.6 billion (€3.24 billion).

It will take some time before all of this is merged into a functioning network in the US. To facilitate the transition, the Agreement with the Ministry of Justice guarantees robust access to T-Mobile’s infrastructure for at least seven years.

Advantages

According to T-Mobile, the merger has several advantages. This allows for lower prices and, according to the company, is better able to compete with larger rivals such as AT&T and Verizon Communications. The U.S. Department of Justice sees another advantage. According to the Ministry, the acquisition is also a way to bring little-used spectrum bands into use. After the merger Sprint and T-Mobile will continue together under the name T-Mobile. Before the deal can be completed, there must be approval from a federal judge and the FCC. However, FCC chairman Ajit Pai said in May that he would let the deal go ahead.

This news article was automatically translated from Dutch to give Techzine.eu a head start. All news articles after September 1, 2019 are written in native English and NOT translated. All our background stories are written in native English as well. For more information read our launch article.