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T-Mobile pledges a three-year price clampdown if merger with Sprint is approved

T-Mobile CEO John Legere speaks on the floor of the New York Stock Exchange, April 30, 2018.
Brendan McDermid | Reuters

T-Mobile US told the U.S. Federal Communications Commission on Monday it would not increase prices for three years, with few exceptions, if it gets approval to buy rival Sprint for $26 billion.

In a letter to the FCC, T-Mobile Chief Executive John Legere asked the government to move forward "expeditiously" in reviewing the merger of the No. 3 and No. 4 wireless carriers, and attempted to allay fears the deal would mean higher prices.

"While we are combining our networks over the next three years, T-Mobile today is submitting to the commission a commitment that I stand behind -- a commitment that New T-Mobile will make available the same or better rate plans for our services as those offered today by T-Mobile or Sprint," Legere wrote in the letter.

Consumer advocates have said that since Sprint and T-Mobile have a big market share in prepaid plans favored by the poorest wireless customers, they were likely to be disproportionately hurt by the planned deal.

The pledge comes a week before two committees in the House of Representatives — Energy and Commerce and Judiciary — hold a joint hearing to discuss the transaction. The hearing is set for Feb. 13, and both Legere and Sprint Chairman Marcelo Claure have agreed to testify.

In a separate government filing, T-Mobile noted that while it would attempt to fend off price increases it may have to adjust rates to pass through costs like taxes or third-party fees that "are not within the control of New T-Mobile."

The companies have also pledged to build customer care centers that will create up to 5,600 jobs and have said that they expected the merger to create more than 12,000 jobs to serve small towns and rural communities.

The proposed merger has won approval from a national security panel headed by the Treasury Department. It is undergoing an antitrust review by the Justice Department and the FCC must decide that the transaction is in the public interest.

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