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Sprint has promised to sell Boost Mobile, one of its prepaid mobile service brands, if its merger with T-Mobile is approved. Both Sprint and T-Mobile operate a number of prepaid affiliates and the Federal Communications Commission was concerned that their consolidation under one roof could stifle competition.
The promise was announced this morning as well as new commitments regarding the deployment of 5G to obtain the approval of the merger. The FCC's president, Ajit Pai, said that he would recommend the approval of the Sprint-T-Mobile merger because of the new commitments.
Sprint said it had 8.8 million prepaid customers in its latest earnings report. The majority of these are probably on Boost Mobile, but the carrier does not break down the exact numbers. Some of these customers also use Virgin Mobile, Wireless Assurance and Sprint prepaid plans.
This is not a huge loss for the merged company, especially since T-Mobile already has a better prepaid brand of products. T-Mobile said it had 21.1 million prepaid customers in the last quarter, most of which are probably on Metro (formerly Metro PCS). Its biggest competitor is probably AT & T, which has 17.2 million prepaid customers.
Boost and Metro are two of the largest prepaid service operators in the United States. Therefore, separating them will provide an additional degree of competition. However, Boost relies on Sprint's network, which means that the brand could become dependent on a competitor's success unless it can reach an agreement to use the network of another wireless service provider.
T-Mobile chief executive John Legere said the merged company "would find a serious, credible and financially capable buyer" for Boost. He also suggests that the buyer can reach an agreement for Boost to continue working on the Sprint / T-Mobile combined network.
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