Dish and T-Mobile reportedly agree on divestiture deal
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.