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T-Mobile and Sprint merger: What you need to know as the deal draws closer

T-Mobile and Sprint merger approved
T-Mobile's John Legere (left) and Sprint's Marcelo Claurre could get some good news on their merger soon. (Image credit: Chip Somodevilla/Getty Images)

The T-Mobile-Sprint merger has the green light to move forward, and now the two companies have circled a date on the calendar to close their long-simmering deal.

After winning regulatory approvals for combining their wireless networks last year, T-Mobile and Sprint still had to contend with a lawsuit filed by the attorneys general of several different states. But that case wrapped up in January and earlier this month, a U.S. district judge officially approved the merger.

It's a big step that leaves us with one combined carrier ready to take on Verizon and AT&T — and a lot of questions about what happens next. Here's what you need to know about the T-Mobile-Sprint merger and what it's likely to mean for your wireless service.

What is the current status of the T-Mobile-Sprint merger?

T-Mobile and Sprint say their merger will close on April 1, nearly two years after they unveiled their plans to combine into a single company.

Here's how we got to this point. T-Mobile and Sprint first announced plans to merge in 2018 and in the ensuing year-and-a-half have spent their time winning approval from assorted regulatory agencies — chiefly the Federal Communications Commission and U.S. Department of Justice, both of whom had to sign off on T-Mobile and Sprint joining forces. Those federal agencies did, but only after extracting some promises from T-Mobile and Sprint meant to alleviate concerns about reduced competition in the wireless space, should those two carriers merge.

The most significant concession: T-Mobile and Sprint had to sell off some of their owned-and-operated subsidiaries to a third company that will become a new nationwide wireless carrier. That company is Dish, which is going to take over Sprint's Boost Mobile business. (This month, Sprint is also folding its Virgin Mobile subsidiary into Boost in anticipation of handing off that business to Dish.) In addition, the New T-Mobile — as the combined carrier will be called — would offer access to some of its wireless spectrum for a few year while Dish builds out its network.

A lawsuit filed by several state attorneys general attempted to block the deal. But on Feb. 11 a U.S. federal judge ruled in favor of letting the merger proceed.

Why did these state attorneys general sue to block the T-Mobile-Sprint merger?

Like most opponents of the T-Mobile-Sprint merger, the state attorneys general who filed the lawsuit fear that the combined carrier will lead to reduced competition in the wireless space. That, in turn, could lead to higher rates and less reliable service. The states suing T-Mobile and Sprint also claim the merger will lead to a loss of jobs.

T-Mobile and Sprint denied all those claims and struck deals with several of the original 13 states suing that involved more concessions about competition. Judge Victor Marrero sided with the carriers, ruling that their merger was unlikely to stifle competition in the wireless space and pointing to T-Mobile's track record of aggressive pricing. The judge also pointed to Dish being set up as a fourth nationwide carrier as alleviating concerns about competition.

Does the judge's ruling mean that the T-Mobile-Sprint merger is moving foward?

In theory, yes, especially now that New York Attorney General Letitia James said she won't appeal the ruling. California, the other big state behind the lawsuit, is still considering its options.

T-Mobile and Sprint did some fine-tuning to the deal in February, announcing that Deutsche Telekom will hold 43% of the New T-Mobile and Sprint owner SoftBank will get 24%. The remaining amount will be owned by public shareholders. T-Mobile and Sprint expect that deal to go through April 1.

But the T-Mobile-Sprint merger has all the regulatory approvals it needs, right?

It certainly has the big ones in the form of the OKs from the FCC and Department of Justice. But California's Public Utilities Commission still has to approve the deal, too. That vote could come soon, as both T-Mobile and Sprint have filed their final arguments with the state regulatory agency, but one report from late last year suggests the decision could be pushed to the summer.

Approval from the California Public Utilities Commission is needed if the New T-Mobile wants to do business in California. And considering how many customers live in that state, that's a clearance T-Mobile and Sprint desperately need.

If I'm currently a T-Mobile or Sprint customer, what will their merger do to my bill?

Nothing should change with your monthly cell phone plan, at least according to T-Mobile. In the process of trying to gain regulatory approvals, T-Mobile executives vowed that customers would have the same or better monthly rates for three years after the deal goes through.

As for what happens after those three years — or what happens if the New T-Mobile doesn't keep its word — we'll just have to wait and see.

Does T-Mobile plan any other changes once it's allowed to absorb Sprint into the New T-Mobile?

While the T-Mobile and Sprint haven't gone into detail about their post-merger plans, back in December they did outline some of the things they intended to do once the merger was completed in an effort to win the support of states that were suing to block the T-Mobile-Sprint merger at the time. That includes creating a new low-cost plan — back in November, T-Mobile promised to launch a $15-a-month plan that features 2GB of high-speed data. That's half the cost of what you'd pay for that same amount of data at Metro By T-Mobile right now.

T-Mobile details its post-merger plans back in November 2019.

T-Mobile details its post-merger plans back in November 2019. (Image credit: T-Mobile/YouTube)

Other initiatives of the New T-Mobile include a plan to provide free broadband to 10 million low-income households with school-aged children. Eligible homes will be able to get five years of free home service offering 100GB of data per year. Another program involves a 10-year commitment to make unlimited talk, text and data free for first responders at every public and non-profit state and local police, fire and emergency services agency.

Oh, and there will be a change at the top for the New T-Mobile. John Legere, the outspoken CEO of T-Mobile, is leaving his post at the end of April. He'll be succeed by chief operating officer Mike Sievert, which should mean less curse words during T-Mobile's product announcements.

What about 5G? How does the T-Mobile-Sprint merger impact the rollout of 5G in the U.S.?

Besides being in a better position to compete with Verizon and AT&T, T-Mobile and Sprint have framed their merger as a way to ramp up the expansion of 5G in this country. Certainly, the new carrier will be able to use its combined 5G spectrum to increase its reach and improve its performance.

Right now, T-Mobile has the largest 5G footprint of any U.S. carrier, covering 5,000 cities and 200 million people. But that network is built on low-band spectrum, which is only slightly faster than LTE, as we learned when testing a OnePlus 7T Pro 5G McLaren using T-Mobile 5G. T-Mobile does use faster millimeter wave technology in parts of seven cities, but it's looking for a way to boost the speed of its 5G network.

T-Mobile's current 5G coverage

T-Mobile's current 5G coverage (Image credit: T-Mobile)

That's where Sprint and its midband spectrum enters the picture. While Sprint's 5G network doesn't quite reach the speeds of millimeter wave, our tests of Sprint's 5G network have found that its faster than low-band networks like T-Mobile's. And like T-Mobile, Sprint's 5G coverage has an extensive reach.

Sprint launched 5G service in nine cities last year, but it's been in a holding pattern while it waited for its merger with T-Mobile to be resolved. With all signs pointing to the merger getting another legal go-ahead, we're a step closer to getting a more detailed view of how the New T-Mobile will build out its 5G coverage.