T-Mobile and Sprint may divest spectrum to get Justice Department’s approval for merger

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We’ve heard that T-Mobile and Sprint are hard at work on convincing the Department of Justice to approve their merger, and now we’ve gotten wind of one concession that the two carriers might make.

T-Mobile and Sprint are thinking about divesting some of their spectrum to improve the odds of the DOJ approving their merger. That’s according to reports from Reuters and Bloomberg, with the latter adding that the divested airwaves would go to the government who would then sell them to create a fourth, competitive carrier in the U.S.

Rumors say that DOJ officials met with Comcast and Charter this week to discuss their interest in T-Mobile and Sprint’s divested spectrum and possibly becoming a fourth major U.S. carrier. Comcast and Charter reportedly said that they’d bid on certain parts of the spectrum and that they’d also be interested in favorable wholesale agreements, network equipment, and customers that could be divested by T-Mobile and Sprint.

T-Mo and Sprint have already agreed to sell off Boost Mobile if their merger is approved, as well as a promise to meet 5G and in-home broadband rollout goals and a pledge to not raise their prices for three years. Those commitments were good enough to get support for the merger from FCC Chairman Ajit Pai, but DOJ officials and antitrust chief Makan Delrahim are said to be on the fence.

Yesterday, a report claimed that the DOJ wants T-Mobile and Sprint to help create a fourth U.S. carrier with its own network before it’ll approve their merger. The combined spectrum of T-Mo and Sprint is a big reason that the two carriers want to merge, as they say it’ll help them build a better 5G network, but they might be willing to divest some of those airwaves if their merger depends on it.

Sources: Reuters, Bloomberg

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  • Deadeye37

    So the government is wanting Charter or Comcast to buy up the divested spectrum and they can start a 4th carrier. My biggest issue is the customers that would be divested to the new Charter/Comcast carrier. That could be very painful, especially if their service & customer service is as bad as it is on the cable side of things.

  • Nathan Williams

    What about selling to us cellular. And what about dish I thought they were going to be a wireless company. Unless the government wants another dish a spectrum holder it’s dumb idea

  • justanormalguy13

    I like the idea of maybe boosting US Cellular, a company that already exists, instead of making another carrier from nothing. Don’t just sell spectrum to sell spectrum. There’s enough spectrum sitters out there who promised they’d use it, but never have.

    • gramps28

      So they can sell off the spectrum down the road like they did
      a few years ago?

    • Glenn Gore

      i.e. Dish Network and US Cellular, who both own massive amounts of spectrum they have never put to actual use and have no plans of doing so. They should both be immediately stripped of this spectrum.

      • Bklynman

        That crazy for US Cellular,if they had use it how many more markets would they be in?

  • SurvivingSunnyvale

    Sounds like they are desperately trying to prevent T-Mobile from actually getting to compete against the AT&T/Verizon duopoly.

    • (J²)

      Right…

      They are fighting for the interest of the big guys. Notice how some of the most hated companies by consumers made the short list…

  • Ver

    I just hate what’s happening Sounds like the DOJ is trying to squeeze then right out of this merger.

  • riverhorse

    Not in favor of spectrum divestiture. There’s TV and home internet coming, plus interference from adjacent WiFi and government bands.
    Amazon Telecom sounds wonderful though.

  • frankinnoho

    WHAT!!!! Divesting SPECTRUM! Are you frakking kidding me? What’s the friggen point of the merger if they end it with LESS SPECTRUM!!!

  • Glenn Gore

    I knew this was coming eventually. Sprint and T-Mobile will have to get rid of half their spectrum, which will leave great holes and entire states unable to get service from the combined company after the merger, which serves no public good at all. Whoever gets the divested spectrum probably will never use it or won’t allow roaming on the new T-Mobile using that spectrum, just like in past instances of spectrum divestiture.

    • yeah right

      This isn’t accurate. Sprint and Tmobile currently have so much overlapping spectrum it is insane. For instance all Tmobiles 600 and 700 mhz spectrum will compete with SPrints 850mhz spectrum. Sprint could divest that over time (that is what sprint runs voice on now i believe). The government would just have to give tmobile time to divest per market, up to 2 years so they could transfer everyone on sprint over to new plans on the merged New Tmobile.

      • Glenn Gore

        Years ago while I was an AT&T customer, AT&T bought Dobson Cellular, a local GSM carrier here and was also our land-line provider here. But, AT&T was not allowed to keep the Dobson assets, including spectrum, plus they were required to divest the spectrum and system they already owned here, completely shutting down service, the stated reason for the divestiture being that you could not have only one GSM carrier. A carrier located in Montana bought the assets and spectrum and did their best to provide no service at all and succeeded in that effort. So there was still only one GSM carrier, it just wasn’t AT&T.

        Years later, AT&T was allowed to buy that Montana carrier, after T-Mobile had built a system and started serving the area (making 2 GSM providers), and once again was able to provide service here. The intervening period was not good, AT&T customers had to find another carrier or live without as no other carrier served the area well and that was before T-Mobile came into the market. That is the situation I was talking about in regards to the sometimes awful effects of carriers being required to divest spectrum and assets of other carriers they purchase or when involved in mergers.

      • SirStephenH

        New T-Mobile would still be short on low-band spectrum compared to Verizon and AT&T if it was to do that. Honestly band 12 would be a better divesture in the end due to TM’s spotty holdings compared to Sprint’s nationwide band 26.

        If you don’t include Sprint’s band 41, which you shouldn’t, then New T-Mobile would have total spectrum holdings about equivalent to Verizon and AT&T in the low and mid bands.

  • dtam

    No point in the merger at all of they have to give up spectrum. How much does spectrum does big red and death star have compared to the potential t-sprint?

    • Robert Roll

      depending on the market the new T-Mobile would leave Verizon and AT&T in the dust far as bandwidth of spectrum in most areas.

      • Mike Smith

        Good… flip the script!

    • SirStephenH

      New T-Mobile’s low-band would be ahead of Verizon and behind AT&T. NTM would be a bit ahead of Verizon and AT&T in mid-band, not including band 41 (2.5GHz) which has very different characteristics than traditional mid-band and is often considered high-band. If you include band 41 then NTM would have around double the spectrum of AT&T (currently the second highest holder behind Sprint).

      Really NTM would be in the same neighborhood as Verizon and AT&T if you don’t include band 41, which you shouldn’t. Band 41 should be considered separately from low-band and traditional mid-band just as mm wave is and just as low-band is considered separately from mid-band as well.

  • SirStephenH

    Band 41 shouldn’t be considered in total low and mid band spectrum holdings. It has different characteristics than traditional mid-band and is often considered high-band. Without band 41 included New T-Mobile would have roughly equivalent low and mid band holdings to Verizon and AT&T. Forcing a spectrum divesture is an insanely stupid idea.