Third Time's A Charm: The $26.5B T-Mobile-Sprint Merger Is Approved

The wireless carriers finally received their long-awaited regulatory approval.

Two of the country's largest wireless carriers received their long-awaited regulatory approval. Sprint and T-Mobile are coming together in a $26.5 billion mega-merger.

The Department of Justice (DOJ) gave the green light on Friday after months of lengthy negotiations between Sprint and T-Mobile. The Justice Department on Sunday had said it would announce its settlement on the deal this week.

[Related: The Top 10 Telecom Mergers And Acquisitions Of 2019 (So Far) ]

As part of the deal with the DOJ, the combined company will divest Sprint’s prepaid businesses and Sprint’s 800 MHz spectrum assets to Dish Network. After the deal closes, the companies will provide Dish wireless customers access to the new company’s network for seven years and offer standard transition services arrangements to Dish during a transition period of up to three years. Dish will also have an option to take on leases for certain cell sites and retail locations that are decommissioned by the combined company.

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division in a statement.

T-Mobile’s stock was up 3.56 percent to $82.76 on Friday after the deal was announced. Sprint’s stock rose 6.32 percent to $7.91 per per share.

Solution providers in the telecom space have been closely watching the proposed merger. Some expressed hope that the new entity would give mobile stalwarts Verizon and AT&T a run for their money by creating a cost-competitive alternative that might leapfrog the competition in the 5G race.

The two companies in May agreed to divest Sprint's prepaid wireless service, Boost Mobile. Reports surfaced on Tuesday that satellite TV provider Dish Network agreed to buy wireless assets off of Sprint and T-Mobile's hands for $5 billion in a deal that was thought to help grease the wheels for the third and fourth largest carriers in the country to finally gain regulatory approval to come together.

The Republican-led FCC under chairman Ajit Pai said it would grant the two companies permission to merge in May under the condition that Sprint and T-Mobile deploy a 5G network that could cover 97 percent of the U.S. population -- importantly, rural America -- within three years and 99 percent within six years after the merger is closed. The newly-combined company also had to agree to give 90 percent of Americans access to mobile broadband service with at least 100 Mbps and 99 percent with access to at least 50 Mbps.

The Justice Department, however, has held out on approving the mega-merger, cited concerns that it would decrease competition and raise prices on consumers.

The DOJ has been pushing for the creation of a fourth carrier in the wake of the third and fourth largest wireless providers in the country coming together. The divesting of wireless assets could help resolve the department's antitrust concerns.

Charter Communications, owner of cable brand Spectrum, submitted a proposal to the Justice Department to buy wireless assets off of the two telecoms, but never heard back, according to a report published Wednesday by Reuters.