The much-anticipated merger between T-Mobile and Sprint received a boost when Ajit Pai, the chairman of the Federal Communications Commission, formally recommended the merger. In a draft order to other FCC commissioners expected to vote for or against the merger, the FCC Chair expressed his positive opinion regarding the proposed merger.
Merger to Benefit American Consumers
In his message to his fellow commissioners, the FCC Chair noted that exhaustive evidence had shown that the merger between these two carriers would increase the rate at which 5G wireless service would be rolled out to clients. Chairman Pai also noted that the merger is likely to increase competition among wireless communications providers, a situation that is likely to lead to better and more cost-effective services to American consumers.
The FCC Chair has long backed the merger since it was announced in May and a number of other commissioners including Brendan Carr and Mike O’Reilly have indicated that they too might support the merger when it came to the vote.
Approval By DOJ
Last month, the proposed merger cleared a major hurdle when it got approval from the Department of Justice. This vote of approval from the FCC Chair will increase the chances of the merger taking place although it still needs to clear some legal hurdles. The merger is however expected to cause a seismic shift in the world of wireless networks. Post-merger, the merged entity will retain the name T-Mobile and the current CEO of T-Mobile Mr. John Legere is expected to continue running the day to day operations
There is a simple logic to the merger. With Verizon and AT&T significantly larger than Sprint and T-Mobile, the merger helps the two compete on near-even terms with the leading companies. The simple economies of scale will help the two companies significantly. It has been estimated by experts that the merger will save the two companies up to $6 billion. If the new entity chooses to pass these cost savings down to their clients, it will serve a great incentive for more people to join the merged network.
There are also anticipated benefits to consumers through better content. T-Mobile, for example, is experimenting with the idea of a 5G television service and bringing Sprint’s 5G broadband network makes this a distinct possibility.
What is Next?
Coming in the heels of the approval by the FCC Chair, the commission has announced that is ready to go ahead with a vote on the deal. The commission had already indicated in May that it would okay the deal but the upcoming vote would give the deal the formal approval of the FCC.
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