DOJ to approve T-Mobile/Sprint merger despite 13 states trying to block it
The Justice Department plans to approve the T-Mobile/Sprint merger as part of a settlement involving the sale of spectrum licenses, wholesale access, and a prepaid wireless business to Dish Network, The Wall Street Journal reported today.
“The companies have spent weeks negotiating with antitrust enforcers and each other over the sale of assets to Dish to satisfy concerns that the more than $26 billion merger of the No. 3 and No. 4 wireless carriers by subscribers would hurt competition,” the Journal wrote, citing people familiar with the matter.
As a result of those negotiations, the DOJ is “poised to approve” the merger and could announce a settlement with T-Mobile and Sprint “as soon as this week, but the timing remains uncertain,” the Journal wrote.
Even if the DOJ approves the merger, T-Mobile and Sprint will still have to defend it in court because of a lawsuit filed against them by 13 states and the District of Columbia.
Dish, the second-biggest satellite TV provider after AT&T’s DirecTV, has been buying spectrum for years without ever launching cellular phone and data service. Previous reports about a settlement involving Dish said that Dish would get wholesale access to the T-Mobile/Sprint network, spectrum, and prepaid wireless carrier Boost Mobile. Boost is owned by Sprint and is a network reseller.
Today’s Journal report said the pending settlement “provides for Dish to acquire prepaid subscribers” but didn’t say whether those will come from Boost. Boost’s involvement seems likely, given that Federal Communications Commission Chairman Ajit Pai’s approval of the T-Mobile/Sprint merger is contingent on the divestiture of Boost Mobile and a guarantee that Boost will have access to the T-Mobile/Sprint network.
“Dish would also get a multiyear agreement to use the wireless companies’ network while it builds dedicated infrastructure,” the Journal wrote. The report didn’t say how much spectrum Dish will get.
Dish to pay $5 billion
Bloomberg reported last night that Dish “agreed to pay $5 billion for wireless assets” in its deal with T-Mobile and Sprint. The deal includes $1.5 billion for prepaid mobile assets and $3.5 billion for spectrum licenses.
“Under the terms of the deal, Dish can’t sell the assets or hand over control of the agreement to a third party for three years,” Bloomberg wrote.
Dish becoming a major carrier could solve the problem caused by the T-Mobile/Sprint merger, that it would reduce the number of major nationwide competitors from four to three. But Dish has famously dragged its feet in using its assets to build a wireless network, with T-Mobile CEO John Legere calling Dish a spectrum hoarder in February of this year. Even under a best-case scenario presented by the settlement with the government, it sounds like it could take Dish several years to build its own network and become a major threat to AT&T, Verizon, and the combined T-Mobile/Sprint.
