FCC Approves T-Mobile Buy of Mint With Handset Unlocking Requirement

“Based on our evaluation of the likely competitive effects, and in light of the benefits resulting from the merger and the voluntary commitments that T-Mobile has made concerning handset unlocking, which we make as a condition of our approval, we find that the proposed transfer will serve the public interest, convenience, and necessity,” said the approval order released Thursday, a little more than a year after the deal was proposed.

T-Mobile expects to close the deal May 1, CEO Mike Sievert said on a call with investors Thursday. Mint’s leadership team is “hyper-focused on offering customers compelling products at a great value,” he said.

Earlier this week, T-Mobile agreed to unlock “all Mint Mobile and Ultra Mobile devices activated on the T-Mobile network both pre- and post-closing.” That concession was less than what public interest and consumer groups said they sought, and not as broad as an earlier Verizon unlocking agreement (see 2404240044). The FCC handed down the order two days after T-Mobile made the concession.

The unlocking commitments “will serve the public interest as they will make it easier for Mint Mobile and Ultra Mobile customers to switch service providers,” the FCC said.

In addition, the FCC said it examined mobile virtual network operators concerns that Dish Network (see 2312190049) and Lyca raised (see 2404180023). T-Mobile has committed to “continue providing Mint Mobile and Ultra Mobile MVNO branded services,” the order said, noting that the MVNO traffic already uses T-Mobile’s network.

The agency also found transaction-specific benefits to the deal, which the companies highlighted. “The elimination of double marginalization” with both companies marking up the cost of service “will reduce Ka’ena’s costs of serving its customers,” the order said: “This should enable the two MVNOs to lower prices or improve service package characteristics, thus benefitting their subscribers. We also give some credit to T-Mobile’s claim that the merger will give Mint Mobile and Ultra Mobile greater device purchasing power and expanded distribution.”

In the fiber deal, T-Mobile will invest $950 million for a 50% stake in a joint venture with EQT. T-Mobile announced plans for an additional $500 million investment in the JV in 2027-2028. The agreement was the subject of rumors. It gives T-Mobile an expanded fiber toehold (see 2403180055). The transaction should close late this year or early in 2025, subject to regulatory approvals, the companies said.

“The JV will bring T-Mobile’s retail, marketing, brand and customer experience strengths together with EQT’s fiber infrastructure investment expertise,” T-Mobile and EQT said in a news release: “Together they will acquire Lumos’ scalable fiber network build capabilities to deliver best-in-class high-speed fiber internet connectivity to customers across the U.S. without access to fiber today.” Lumos serves 320,000 households and has more than 7,500 route miles of fiber. The companies said the JV will allow Lumos to reach 3.5 million homes by the end of 2028.

EQT is one of the leading infrastructure investors in the U.S. and Europe “and brings a wealth of knowledge to the table,” Sievert said on a call with investors Thursday. Lumos’ management team has “years of experience building fiber in an efficient, cost-effective and targeted build model,” he said.

“T-Mobile is already the fastest growing broadband internet provider with 5G Internet,” Sievert said on LinkedIn. “We've always felt that fiber would be a great complement to what we do, because the demand for reliable, low-latency connectivity is rapidly increasing.”

“It is tough to extract valuation metrics from what has been reported, given that T-Mobile is buying an equity stake and all the subscribers, and they know their capital is going toward building more locations,” New Street’s Jonathan Chaplin said in a note to investors: “While we would view the agreement as a smart move by T-Mobile, the JV will only reach 2-3% of US households by 2028, which is far from enough to move the needle. If convergence proves critical, we would expect bigger deals in [the] future.”