The planned merger of T-Mobile USA and MetroPCS received approval from the US Federal Communications Commission (FCC), while the Department of Justice (DoJ) has closed its investigation into the deal.
FCC chairman Julius Genachowski said that with the approval of the deal, “America’s mobile market continues to strengthen, moving toward robust competition and revitalised competitors”.
He added that the approval will benefit millions of American consumers and help the US maintain “the global leadership in mobile it has regained in recent years”.
The DoJ’s antitrust division said in a statement that it had closed its investigation as the merger “is unlikely to harm consumers or substantially lessen competition”. The news was largely expected after MetroPCS said the DoJ had not made an objection to the deal before a regulatory deadline.
The DoJ blocked a deal for T-Mobile to merge with AT&T late in 2011, arguing that a deal to combine two national operators would harm competition.
However, with MetroPCS being a tier-two player it has less of an effect on mobile competition and the merger with T-Mobile “is not likely to lessen competition substantially at local levels”.
The DoJ added that proposed deal could actually have a “procompetitive impact” as it improves the scale and spectrum position of T-Mobile, allowing it to better compete with the other national carriers.
One of last major obstacles to the deal is a shareholder vote due to take place on 12 April. The Committee on Foreign Investment in the United States is also yet to confirm its decision on the deal.
The outcome of the shareholder meeting is hard to predict with some shareholders publicly criticising the merger due to the valuation of MetroPCS and the proposed $21 billion debt level for the combined company.
Paulson & Co, the company’s top shareholder with a 9.9 per cent stake, has backed P. Schoenfeld Asset Management, which holds a 1.66 per cent stake, in its proxy battle against the merger.
If the deal goes ahead, T-Mobile parent Deutsche Telekom will have a 74 per cent stake in the combined company with MetroPCS holding the remainder.