The U.S. Federal Communications Commission has approved the $21.6 billion acquisition of Sprint by Japanese telecommunications group Softbank, saying it promises to bring consumers faster and more advanced wireless broadband Internet service.
The go-ahead from the FCC was the final hurdle to Softbank consummating the deal. Sprint shareholders in late June approved the acquisition that will see Softbank pay $7.64 per share, for a total of $16.64 billion in cash, and invest about $5 billion of new capital into Sprint. It will own 78 percent of the new company.
Friday's decision also helps clear the way for Sprint to take full control of Clearwire, a struggling but spectrum-rich wireless broadband provider. Sprint already owns just over half of Clearwire, which provides the network for its 4G WiMax service, and is planning to spend $3.7 billion to acquire the rest of the company. The U.S. Department of Justice approved the acquisition in June.
Clearwire shareholders are due to vote on that plan on July 8.
"Today is a good day for all Americans who use mobile broadband services," said Mignon Clyburn, acting chairwoman of the FCC, in a statement. "The increased investment in Sprint's and Clearwire's networks is likely to accelerate deployment of mobile broadband services and enhance competition in the mobile marketplace, promoting customer choice, innovation and lower prices."
Analysts see the deals creating a telecom carrier that will be better matched against market leaders AT&T and Verizon Wireless. The new company will start with about half the number of subscribers of its bigger rivals, but will have nearly twice the radio spectrum in major metropolitan areas, analysts say.
"Just two years ago, the wireless industry was at the doorstep of duopoly, but with these transformative transactions, we are one step closer to a stronger Sprint which will better serve consumers, challenge the market share leaders and drive innovation in the American economy," said Sprint CEO Dan Hesse in a statement.
Sprint said it expects that the transactions will close in early July, subject to the remaining closing conditions.