LONDON (ShareCast) - (Sharecast News) - Shares in Sprint Corp surged on Monday after US Federal Communications Commission chairman Ajit Pai said he would recommend approval of its $26.5bn merger with T-Mobile.
Responding to commitments made by the companies to get the deal through, which include not raising prices, building out 5G in rural areas and selling off Boost Mobile, Pai said: "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. The commitments made today by TMobile and Sprint would substantially advance each of these critical objectives.

"For example, the companies have committed to deploying a 5G network that would cover 97% of our nation's population within three years of the closing of the merger and 99% of Americans within six years. This 5G network would also reach deep into rural areas, with 85% of rural Americans covered within three years and 90% covered within six years. "

He also pointed to the fact that T-Mobile and Sprint have guaranteed that 90% of Americans would have access to mobile broadband service at speeds of at least 100 Mbps, while 99% would have access to speeds of at least 50 Mbps.

"The construction of this network and the delivery of such high-speed wireless services to the vast majority of Americans would substantially benefit consumers and our country as a whole," he said.

Pail also welcomed the companies' commitment to a "robust" build-out of their mid-band spectrum holdings.

"In light of the significant commitments made by T-Mobile and Sprint as well as the facts in the record to date, I believe that this transaction is in the public interest and intend to recommend to my colleagues that the FCC approve it. 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."

Sprint shares fell sharply last month after The Wall Street Journal reported that the merger - announced back in April 2018 - was unlikely to win the approval of the Justice Department, which is conducting its own review.

Last year, the DoJ unsuccessfully tried to block AT&T's $85bn acquisition of Time Warner.

At 1437 BST, Sprint shares were up 27% to $7.88 and T-Mobile was 7% higher at $80.68.

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