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National Wireless Independent Dealer Association

It’s a Done Deal

Well – except for the 13 states suing to stop it. But other than that…

Bloomberg is reporting that the DoJ has approved T-Mobile’s acquisition of Sprint – a deal it rejected under the previous administration, clearing one of the biggest hurdles to a takeover that will reshape the wireless industry.

T-Mobile and Sprint agreed to sell multiple assets to Dish as a condition for approval, paving the way to creating a new wireless company, the Justice Department said in a statement Friday. The carriers have promised to deploy a 5G network that would cover 97% of the U.S. population within three years and 99% within six years.

“The remedies set up Dish as a disruptive force in wireless,” said Makan Delrahim, the head of the Justice Department’s antitrust division, during a briefing with reporters.

In addition to spectrum, Dish is buying Sprint’s prepaid businesses Boost and Virgin. T-Mobile also is required to provide Dish with access to its mobile network for seven years while Dish builds out its own 5G network, according to the statement.

Delrahim said Dish is paying $5 billion to $6 billion for the assets and that there are penalties if the company doesn’t follow through on its commitments.

The Justice Department approval moves Sprint and T-Mobile a step closer to completing their $26.5 billion tie-up and gives the carriers a significant boost as they contend with a lawsuit by a group of states that say the deal should be blocked because it would harm consumers.

If the states decide to continue the litigation, they will have to convince a judge that the agreement with Dish to establish a new wireless carrier doesn’t go far enough to resolve competitive harm from the merger. 

The states wrote a New York judge late Thursday to complain about what they said is a lack of transparency around the planned Dish deal, which the states suspect may be arranged to “hobble” Dish as a competitor.

The combination of T-Mobile and Sprint, the No. 3 and No. 4 wireless carriers in the U.S., also has come under fire from lawmakers and consumer advocates who say it will lead to higher prices and less innovation in a market that is already concentrated. The deal leaves just two other national carriers: Verizon Communications Inc. and AT&T Inc.

Yet by acquiring Sprint’s spectrum, T-Mobile will have nearly twice the wireless capacity of any other carrier. That should lower prices for subscribers by cutting in half the company’s cost per gigabyte, a measure of how expensive it is to deliver service, according to Jonathan Chaplin, an analyst with New Street Research LLC.

The Dish agreement is aimed at allowing the merger while maintaining four national wireless carriers, a longstanding requirement of the Justice Department. To work, Dish, the No. 2 U.S. satellite-TV provider, will have to build a national network. That could be a steep challenge. The company owns billions of dollars worth of unused airwaves, but it has no experience selling phones or operating a mobile service.

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