T-Mobile share price up 2% after FCC chair recommends Sprint merger
The telecommunications company's stock rises after the FCC chair backs a merger with Sprint.
T-Mobile share price and Sprint stock have soared after US Federal Communications Commission (FCC) Chair, Ajit Pai, said that he would recommend the agency approve the merger of the two phone companies. Though the $26.5 billion merger has been attempted for two years, this latest endorsement from Pai could bring the deal closer to being finalised.
Why does the FCC chair recommend the T-Mobile/Sprint merger?
T-Mobile and Sprint are two of the smaller phone companies trying to compete with AT&T and Verizon by joining together. The companies contend that by joining forces, they can provide better 5G phone service than their competitors. Pai agreed and said that the T-Mobile/Sprint merger will help speed up the implementation of 5G technology into rural areas of the US.
‘Two of the FCC’s top priorities are closing the digital divide in rural America and advancing United States leadership in 5G, the next generation of wireless connectivity. This is a unique opportunity to speed up the deployment of 5G throughout the United States and bring much faster mobile broadband to rural Americans. We should seize this opportunity,’ said Pai.
US FCC commissioner, Brendan Carr, also praised the impending telecommunications megamerger. He endorsed T-Mobile and Sprint’s commitment to providing the new generation of wireless technology to rural consumers who don’t have reliable access to Wi-Fi.
‘Today's commitments to bring 5G to rural America are verifiable and enforceable,’ said Carr.
What’s next for the T-Mobile/Sprint merger?
Though Pai and Carr recommend the T-Mobile/Sprint merger, the deal still has to be approved by the US Department of Justice to ensure it doesn’t violate antitrust laws. The FCC officially votes on approval of the merger on June 15.
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