Dish and T-Mobile reportedly agree on divestiture deal

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There’s been a lot of talk in recent weeks about talks between Dish Network, T-Mobile, and T-Mo parent company Deutsche Telekom about a deal that would help get the T-Mobile-Sprint merger approved by regulators, and now a report says that Dish and T-Mo have reached an agreement.

T-Mobile and Dish have agreed to a divestiture deal related to T-Mobile’s proposed merger with Sprint, according to sources speaking to CNBC. The details of the deal aren’t given in the report, but it does say that they’ve “agreed on some of the largest components of the divestiture deal.”

However, there are still some issues that the Department of Justice is focused on before it would approve T-Mobile and Sprint’s merger. It’s said that the DOJ is concerned that the deal isn’t enough to ensure that Dish is competitive in the U.S. wireless market. The DOJ wants T-Mo and DT to sell spectrum and make other commitments to help ensure that there’s a fourth competitive U.S. carrier, but T-Mobile has reportedly been resistant because it wants to limit Dish’s spectrum capacity to 12.5 percent. DT is said to want to limit any strategic Dish investor to 5 percent.

Dish is thought to be the one of the best options for striking a deal with T-Mobile and becoming a fourth major U.S. carrier because it already has a large amount of spectrum. Reports have also suggested that Dish is Deutsche Telekom’s preferred company to strike a deal with T-Mobile and Sprint.

It’s said that one sticking point is that Dish wants a spectrum use deadline imposed on it by the FCC to be waived. There’s no word yet on whether or not Dish has gotten what it wants, but Dish Chairman Charlie Ergen has met with FCC Chairman Ajit Pai and DOJ antitrust chief Makan Delrahim recently.

 

UPDATE: Another report from CNBC sheds a bit more light on the talks between Dish, T-Mobile, Deutsche Telekom, and the DOJ. The sides are reportedly nearing a deal that would include Dish getting access to the T-Mobile-Sprint network for six or seven years, after which it’d have to move onto its own network that it would build during that time.

The DOJ reportedly wants Dish to have unlimited access to T-Mo’s network, while T-Mobile argues that Dish should only have access to 12.5 percent of the capacity. T-Mo has also said that no investor in Dish should have more than a 5 percent stake, a move to try and prevent Dish from getting help from a big company like Google or Amazon on its network.

Finally, it’s said that Dish and T-Mobile have come to a “rough agreement” on a divestiture deal that includes a revenue-sharing agreement as well as Dish buying spectrum and Boost Mobile. 

Source: CNBC

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  • Jay Holm

    Good!!! Move forward with the merger already!!! I want phone’s before the end of the year with the combined companies spectrum!

    • Phones fully utilizing the spectrum probably won’t happen until sometime in 2022 or later to be honest. The Metro merger took about 3 years to fully complete, and Sprint is a great deal larger. Their customers don’t change devices as often as a prepaid carrier does, so T-Mobile will likely be stuck with supporting some CDMA for awhile until they can fully transition to 4G LTE and 5G, to say nothing of their current support for 2G and 3G tech.

      • Jay Holm

        Umm, doesn’t T-Mobile usually stop selling the other companies phones (MetroPCS) immediately, and start selling phone’s compatible with the T-Mobile network? That’s how I remember it anyway, T-Mobile is really good at migrating customer’s off an old network.

        • This is true, but network build outs take a long time, even with T-Mobile’s brilliant Neville Ray at the helm. They’re going to need to support CDMA for at least 6 months after the merger completes, if not longer, due to over 50 million people needing new phones that fully utilize the spectrum. Or they’re going to have to overload their current network. Remember, there are 50 million people using Sprint right now. There’s no way T-Mo’s current network will be able to maintain capacity with 50 million new hookups. They’ll need Sprint’s spectrum to do that.

        • SirStephenH

          The official plan has been to allow full, unrestricted roaming between the networks immediately after the merger is complete. Then New T-Mobile will maintain Sprint’s network for 3 years before completely shutting it down. Sprint’s spectrum will be refarmed to New T-Mobile as demand drops. By the end of the 3 years there should be little spectrum left on Sprint and almost all customers should be on a fully compatible phone due to the usual 2-3 year upgrade cycle. Any slackers will likely be offered free low-end or discounted phones at that time just like with the MetroPCS merger.

        • Exactly.

        • marque2

          With Metro they waited two years as people naturally slowly purchased new phones they were pushed onto TMobile at a rate of around 3.5% a month (this is a reasonable rate guess on my part )

      • DDLAR

        I think most (all?) Sprint phones sold for the last few years support LTE (also, many CDMA phones sold today also support GSM). There are probably a few towers and a few phones left that don’t support LTE, but it should not take long to address them. As long as LTE is available VOLTE is a suitable replacement for CDMA. After they combine, or setup the ability to roam on each other’s, LTE networks shutting down CDMA should not take very long.

        • Loco Mole

          Yes and no on Sprint LTE devices being plug amd play on Tmo network. No, not all of them will support TMo bands l66 or 71, but yes, for the most part getting the phone SIM-unlocked and able to accept TMo SIM would get them on TMo traditional bands, but no, features like VolLTE or WiFi calling will not necessarily work out of the box.

        • But Sprint’s phones would largely use only one or two of T-Mobile’s bands. Plus 50 million+ Sprint customers on just those bands would effectively cripple the network. So they’ll need Sprint’s spectrum to make up for the additional capacity needed, either by keeping CDMA for awhile and steadily refarming it to LTE as customers in each market get new phones, or by farming Sprint’s unused spectrum to LTE to serve the additional capacity.

        • George B

          DDLAR, to support roaming, the Competitive Carrier Association pushed for devices that would work on Sprint, T-Mobile, US Cellular, C Spire, and various smaller CCA member networks. Phones activated on Sprint in the last several years should support LTE on T-Mobile’s main bands 2, 4, and 12 along with Sprint’s main bands of 2, 25, 26, and 41. I haven’t seen a phone that didn’t support bands 2 and 4, so this is mostly a non-issue except for covering all of lower 700 MHz, Band 12, vs. just covering the AT&T subset, Band 17. Support for Band 66 which is a superset of Band 4 is also very common. The main limitation will be lack of 600 MHz Band 71 support.

        • Good to know!

        • marque2

          The problem is as often happens when LTE is not available – Sprint phones have more bands devoted to CDMA not HSPA+. TMobile after two years will probably offer everyone at Sprint a $200 credit towards a new phone or.a.”free” $200 value phone. Problem solved

    • Kaulana1989

      Most phones already do support band 41

    • SirStephenH

      Most Sprint and T-Mobile phones have supported both networks’ spectrum for years.

    • Reagan1

      Exactly! Get this $hit over with already and create another 5G competitor vs the “Big 2”.

  • det_b

    How about they abandon Sprint and just merge with Dish?

  • Alex Pilaia

    Tmobile: “We just bought Layer 3 TV, and just came out with OUR OWN TV technology, but we are OK giving some of our assets to a rival TV company….” How does this make sense? Unless there is something within the Sprint Merger that makes any of this make sense for Tmo… and we just don’t know about it….

    • SirStephenH

      They’re not talking TV, they’re talking wireless spectrum, Boost Mobile, and other CELLULAR assets.

  • If Dish wants unlimited access they need to pay for it. 12 percent is good enough at least they get that for free.

  • randian

    I wonder who is reporting “the DoJ is concerned”. DoJ, or gaslighting by Dish?