The Justice Department has approved a $26 billion merger between telecom giants T-Mobile and Sprint on Friday morning, paving the way for the third and fourth-biggest mobile carriers in the U.S. to join forces.
Once combined, T-Mobile and Sprint would cover 80 million U.S. customers and command about 30% of the U.S. mobile market — placing the new company slightly behind AT&T and Verizon in the States, according to The Wall Street Journal.
The deal comes with a few stipulations. Sprint will need to divest some of its wireless spectrum to Dish Network, and both T-Mobile and Sprint will give Dish access to at least 20,000 cell sites. Dish will also have access to hundreds of retail locations from both companies and will be allowed to use T-Mobile’s network for seven years, as it looks to build its own 5G network.
Sprint will also divest from Boost Mobile, Virgin Mobile and its prepaid phone business as part of the merger. Justice Department Antitrust head Makan Delrahim said the merger would “substantially harm competition” if these concessions hadn’t been made.
The Justice Department’s approval puts the deal one step closer to completion. Sprint and T-Mobile will need the Federal Communications Commission to sign off as well, but FCC Chairman Ajit Pai previously indicated that he will give merger a green light. The companies still face lawsuits from several states that are attempting to block the deal.
“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,” Delrahim added in a statement.
Sprint’s stock jumped 6% to about $8 per share on Friday morning, while T-Mobile shares increased 4% to $83.11.