T-Mobile and Sprint, some of the biggest telecom operations companies out there, decided to join forces and merge to create “New T-Mobile.” The newly-founded company needed to receive an accord from the Federal Communications Commission.
This merge is worth $26.5 billion. However, New T-Mobile will still not be able to surpass the two first telecom companies in the US, Verizon, and AT&T.
Although the FCC approved the merger of the two giants, the commission requests some conditions to be respected in order to keep things in order. One of them requires New T-Mobile to make sure that their coverage is strong enough to be available to about 97% of the population. In order to reach this goal, the FCC granted New T-Mobile a period of 3 years to accomplish the condition.
The second condition states that the new company will provide 9 out of 10 customers with internet connectivity at speeds of at least 100 Mbps. For this condition, New T-mobile has six years to accomplish it. If the company does not meet the stipulations, the FCC can impose a penalty of $2 billion.
This merge was first announced in 2018 when the two companies announced their decision. An entire year was needed to receive official approval from the FCC.
Since technology is continuously and rapidly evolving, the mobile phone system is going through changes. Therefore, this kind of strategy does not come as a surprise. When two relatively weak companies come together, they might create a bigger, stronger company that can achieve both of the previous companies’ goals.