The merger of Sprint and Nextel Communications Inc. won approval from the Federal Communications Commission and the Justice Department yesterday, clearing the way for a combined company with more than 35 million mobile phone subscribers.
The companies said they expect the $35 billion merger to close within two weeks and joint operations to begin within two months, meaning consumers may see joint advertising on television and new signs in stores by October.
The combined Sprint Nextel will be the nation's third-largest mobile company and will have more ammunition to compete against its much bigger rivals, Cingular Wireless and Verizon Wireless, and to forge potentially lucrative partnerships with cable companies.
The company will continue to market to Sprint's customer base and to Nextel's loyal business clients, who are devoted to its "push to talk" walkie-talkie-like feature.
For now, the companies will continue to operate two different network technologies, so customers will not have to switch out their phones. They hope to develop a new version of Nextel's "push-to-talk" service that will operate over Sprint's network, allowing current Nextel customers to use the feature with Sprint customers.
The combined company also plans to expand into key areas -- pushing its customers to "cut the cord" with their land-line phones, and marketing its wireless service through cable companies.
Sprint Nextel aims to expand its wholesale business, striking deals with companies such as Walt Disney Co. and ESPN to market customized phone service to niche customers.
The FCC said in a statement that the merger would "serve the public interest, convenience and necessity, and that the likely public interest benefits of the merger outweigh any potential public interest harms."
But FCC commissioner Michael J. Copps signaled some skepticism because of the flurry of mergers in the last year that have reduced the number of major U.S. mobile phone companies from six to four: Cingular Wireless, Verizon Wireless, Sprint Nextel and T-Mobile.
"I am . . . concerned about what this substantial reduction in the number of competitors may mean for wireless consumers. The FCC will have to take a hard look at whether we have gone about as far as we can go," Copps said in a statement.
Cingular Wireless is owned by SBC Communications Inc. and BellSouth Corp.; Verizon Wireless is owned by Verizon Communications Inc. and Britain's Vodafone Group Plc; and T-Mobile by Deutsche Telekom AG.
The Justice Department, which completed an antitrust review, said in a separate statement that it saw no reason to challenge the merger, saying consumers "will continue to have a number of other carriers from which to choose."
The companies argue that consumers will see benefits in the form of new services, such as faster networks that allow reliable Internet surfing over mobile devices.
The FCC's only significant concern about the merger was resolved when Sprint and Nextel promised to use some of their high-frequency spectrum to offer such services to 30 million people within six years.
The companies sought swift regulatory approval in the hopes of being able to launch a full marketing campaign for Christmas, and they have already unveiled a new corporate symbol -- a yellow-and-black "Sprint" logo.