Justice Department officially approves T-Mobile and Sprint’s merger

claure-legere-tmobile-sprint-merger

There’s been a lot of back and forth lately about whether the Justice Department would approve the T-Mobile and Sprint merger, but today we finally got a decision.

Today the Justice Department officially announced that it is approving T-Mobile and Sprint’s merger following an agreement between T-Mo, Sprint, and Dish Network. This agreement is meant to position Dish as the fourth competitive U.S. carrier, taking Sprint’s place.

As part of the agreement, Dish will purchase all of Sprint’s prepaid businesses, which include Boost Mobile, Virgin Mobile, and Sprint prepaid customers and include 9.3 million customers. Dish will pay around $1.4 billion.

T-Mobile and Sprint will also provide at least 20,000 cell sites and hundreds of retail locations to Dish, and T-Mo must give Dish “robust access” to the T-Mo network for seven years while Dish builds out its own 5G network. Boost, Virgin, Sprint prepaid, and new Dish customers will have full access to Sprint’s legacy network and the new T-Mobile’s network “in a phased approach”.

The new T-Mobile has also agreed to provide transition services for Dish for up to three years following the close of the divestiture deal. These servces will help move Boost, Virgin, and Sprint prepaid customers to Dish and ensure that these businesses continue to operate seamlessly after they’ve moved to Dish’s ownership.

The deal includes Dish acquiring Sprint’s portfolio of nationwide 800MHz spectrum for around $3.6 billion. This deal will be completed following an application to the FCC that’ll be filed three years after T-Mobile and Sprint’s merger closes, which will give time for the new T-Mobile to serve legacy Sprint customers during the network integration process. The companies also have an agreement to provide the new T-Mo with the option to lease back some of the spectrum sold to Dish for two years following the closing of the spectrum sale.

After the closing of T-Mobile and Sprint’s merger and the integration of the new T-Mobile, Dish will have the option to take on leases for “certain cell sites and retail locations” that’ve been decommissioned by the new T-Mobile. These leases could last for five years.

dish-logo-new

Dish has committed to network buildout schedules using its 600MHz, 700MHz E Block, AWS-4, and AWS H Block licenses.

The agreements struck today require Dish to use its spectrum to deploy a nationwide 5G network that covers at least 70 percent of the U.S. population by June 14, 2023. If Dish doesn’t meet this deadline, it’ll have to pay up to $2.2 billion to the U.S. Treasury.

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Makan Delrahim, Assistant Attorney General of the Justice Department’s Antitrust Division. “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide. I want to thank our state partners for joining us in this settlement.”

This is a major step for the merger that T-Mobile and Sprint announced last year, but the merger isn’t complete quite yet. There’s still the lawsuit from 14 state attorneys general, who have sued to block the merger over concerns that it could harm competition and raise prices for consumers.

“We have serious concerns that cobbling together this new fourth mobile player, with the government picking winners and losers, will not address the merger’s harm to consumers, workers, and innovation,” New York Attorney General Letitia James said in response to the Justice Department’s approval of the merger.

“Dish has never shown any inclination or ability to build a nationwide mobile network on its own and has repeatedly broken assurances to the Federal Communications Commission about deployment of its spectrum,” James argued.

The trial is set to begin on October 7, but the state AGs have been working to push that date back so that they can review settlement documents.

During T-Mobile’s Q2 2019 earnings call today, CEO John Legere said that T-Mo continues to be willing to engage with state AGs, including those in the aforementioned lawsuit. Legere added that T-Mobile and Sprint expect to receive final federal regulatory approval for their merger in Q3 2019, and they anticipate that the merger will be permitted to close in the second half of 2019.

Sources: Justice Department, T-Mobile, Dish Network

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  • here comes the congestion

    • ekt8750

      Hopefully “robust access” doesn’t prevent them from throttling Dish subscribers when need be.

      • marque2

        We might tease dish customers a bit – but I doubt we would get mad and throttle them.

    • Jay Holm

      You don’t have confidence in Neville Ray merging the networks?

    • Shaun Michalak

      2 things about that. First, Sprint customers already have access to the T-Mobile network. They made a deal with Sprint about a year or so ago, that Sprint customers have access to T-Mobile towers for something like 3 or 5 years.. So basically, they have already had access to the network for at least a year already. Second, when it comes to Dish customers, they have already said that they will leave the Sprint towers up for years, so that will dramatically reduce congestion on the T-Mobile network.. Not only that, but it said that Dish had something like 3 years to build its network out to cover 70% of all of the USA.. That is about how long that they are going to leave up the Sprint towers, so I do not see that big of a difference in congestion vs what is there now.

      • marque2

        As you point out – it goes both ways. Sprint has a lot of towers in places where TMobile does not. EG highway I8 in AZ. TMobile has two towers and in large spots is unserviceable. Sprint has 5 over that range. Having 7 towers now should be a boom to drivers in that stretch. I am sure there are lots of similar situations.

  • Moby

    Such great news! Now Legere is going to have major resources to really get after AT&T and Verizon. Those two better look out! Johnny is coming your way like a big freight train!!!

    • Robert Roll

      they still have the Lawsuit filed by 13 states to deal with and the latest tweet from the New York AG shows she is not backing down

      • Jay Holm

        Screw them!!!!! Two companies merging is between the FCC/DOJ/SEC. Not an individual state!!!

    • Mike Smith

      Legere is out pretty quick it sounds like Sievert is taking over and Braxton is out the door too.

  • Sharti24

    Great, now Dish gets to squat on more spectrum for a few more years

    • The problem was that Dish didn’t have a way of providing a real, competitive wireless network. They had $50 billion worth of spectrum and were likely planning on selling it rather than using it due to the lack of return they would have experienced had they gone ahead with building it out.

      It’s very expensive operating a wireless network, let alone building one. Now that they have the use of T-Mobile’s network and 9.3 million subscribers, it’s a monetized asset that they can fully deploy without so much risk.

      Not trying to make excuses for Dish, though. It sort of seems like Eregen didn’t plan very well when he bought all of that spectrum. It’s like the company realized how expensive it was going to be and decided to hold the spectrum until the last minute until they either 1) found a buyer, 2) found a partner, or 3) acquired an existing wireless network.

      • Sharti24

        If Dish really wanted to get into the wireless game why wouldn’t they just buy out all of Sprint instead? I dont see ever Dish operating a nationwide cellular network.

        • Roger Sales

          Because Sprint isn’t going to be successful on their own no matter who owns them.

        • Sharti24

          All of Sprint would of been bought out by Dish and The Sprint name would of disappeared. That is what i was getting at

        • marque2

          I think a Dish phone would have had better notoriety than Sprint.

        • Fabian Cortez

          Because Sprint isn’t going to be successful on their own no matter who owns them.

          Except apparently T-Mobile because some people want 5G and a few want golden parachutes.

        • Robert Roll

          Dish network tried to buy out sprint a few years ago but was outbid by Japanese Company Softbank

        • Sharti24

          And i believe they outbid softbank if i read the article correctly

        • Mike Smith

          Debt?

    • MisterListerSir

      20,000 cell sites for 7 years and two operators.

      Doesn’t sound like they have any intention of squatting to me.

    • Mike Smith

      No, they’re specifically prohibited from doing that, and why would they WANT to after dropping another five billion on this?? The good news is it sounds like T-Mo is going to lease some band 71 back from Dish which will benefit them both as they c an light it up faster and Dish gets to use it anyway.

  • Boom … Now to wait for the FCC / California Utilities for approval. See you all in the second half of 2020! :P

    • Jay Holm

      Umm, it still baffled me as to what an individual state thinks it is their place to approve/disapprove a merger, that is the job of federal agencies, FCC/DOJ. . .not any one individual state.

      • True, but they are still required to get approval from 19 state public utilities, 18 of which they have with only California still outstanding. These are necessary to protect some form of competition in each individual state as well as current / potential employees from each state.

        • Jay Holm

          So there are 50 states, 18 have approved, and California is in the way….why can’t another state be the required 19th state?

  • mreveryphone

    Thank you Alex for bringing all the updates about this merger to us! Hopefully this lawsuit from the 13 states doesn’t drag on too long…

    • Moby

      Five of the states agreed to drop their objection (shown in the DOJ announcement.)

      • mreveryphone

        Getting better already

  • Eric A

    I, for one, welcome our uncarrier overlords.

    • Kevin

      They are un-carrier right now. Things can change anytime. They maybe the carrier after the merger is done. And customers have nowhere to hide.

  • npaladin2000

    This is worth it just to get Dish off of its collective….spectrum. They could have been a fifth carrier by now and this would have been a moot argument.

    • marque2

      I don’t think having a network was their goal. I think they wanted to make their own interactive wireless spectrum cable network to compliment the satellite TV service – but streaming video came on too fast and it probably realized it would cost too much to develop.

  • Kevin

    What a mess. This merger really doesn’t benefit wireless customers. It would had been much better if Dish bought all of Sprint and change the name. Even after this merger, it is still uncertain if Dish will be a 4th Nationwide carrier.

    • Mike Smith

      No, it’s not uncertain. At all.

    • Moby

      It benefits T-Mobile customers. We’re going to have a much better network now. I could not care less about other wireless customers in general.

    • Albert Orange

      Quit thinking in terms of “wireless customers” and “cellular carriers.” If all works out as promised. the new T-Mobile will be a formidable competitor in the home broadband business (as well as the TV business). Cox, Comcast, Charter…. etc need to be stripped of their monopolies they have in their respective markets.

      • Kevin

        5g will not be enough for home broadband, especially with 8k tv coming soon.

        • marque2

          8k TV might need 20mbits per second. It isn’t more than 4g can handle now. What are you talking about?

        • Kevin

          8k needs more than 20 mbits per second speed, otherwise it would buffer or downgrade to 4k.

        • marque2

          On second thought I agree roughly 40 mbs. But still within the realm of 4g. I’ve hotspotted to get 2k just fine with 4g and speeds areucj faster now, at least in some spots.

        • Jay Holm

          If you do an easy Google search “Speed required to stream 8K” you will see for yourself that it is 80-100mbps.

        • Albert Orange

          The upper echelon of consumers might have a desire to stream 8K, but it will not be the norm. 4K TV’s are barely becoming mainstream..5G networking at 500Mbps – 1 Gbps will be fine for 90% of Americans… and it will be a blessing for those currently living is small town America.

        • ugp5

          How exactly do you propose to back-haul those towers in small town America? No fiber there. With multiple microwave hops to the nearest fiber fed tower? That will not yield these 500Mbps speeds you describe.

        • Mike Smith

          They’re not exactly a priority there aren’t enough people there to justify the costs.

        • ugp5

          That is not what the CEO told congress under oath in order to justify the merger. There is going to be a lot of explaining to do if Legere does not make small town America a priority.

        • marque2

          It will be easier to string fiber to one tower to cover a 400 square mile area than it would to go to all the individual houses. I think there are economies of scale that would permit more rural build up. Note they probably won’t get the 500mbs speed for home Internet since the frequency would be lower but hey my family does fine with only 30

        • Jay Holm

          Huh? You are saying 500mbps-2/3gbps isn’t sufficient for 8K? We are going to have to revisit that conversation at the end of 2020, or first half of 2021. . .

        • marque2

          I think he is upset over my 20mbs estimate for 8k. Yeah thinking it over 40mbs is more reasonable – but with better compression from faster cpus it will probably be less.

        • Kevin

          It is sufficient for one stream of 8k if TMobile allow it to happen. Hopefully they don’t throttle you to lower resolution and then make you pay more to stream in 8k. Also don’t forget bandwidth is shared with other multiple 8k tv streamers in the area and other smartphone users. So…the 5g network might not be able to handle it.

      • ugp5

        What a joke!

        They would need to build a fiber network to provide real home broadband. Have you not noticed how congested the wireless network is already!
        I can hear Comcast and Charter laughing all the way to the bank.

        • marque2

          It will happen. There are already signs that mobile data needs are peaking. Seriously who needs to download a movie in a second vs a minute? When they are able to catch up the big three will go after cable. And all they would really need to do is say – unlimited hotspot and cable is doomed.

        • Mike Smith

          Who downloads a movie when you can stream it?

        • marque2

          I tend to agree with you. I have only downloaded movies twice – for airplane flights.

          But you always get the weirdo on this board complaining how downloading movies on 5g Verizon will be so much better than TMobile. I scratch my head reading that as well.

        • Mike Smith

          What congestion? They’re not congested now and the merger will give them 8 times the capacity.

        • ugp5

          So just have to wave a magic wand and congestion is gone?

    • ugp5

      Time will tell. If Dish wants to be a nationwide carrier they will need to attack early while they are on T-Mobile’s network. They will need to undercut prices with a $20 individual unlimited plan to build a customer base. In other words, they will need to become the new turbo-supercharged uncarrier. Otherwise, you are correct this merger does not benefit wireless customers.

  • Jay Holm

    Yayyyyyy!!!!! Time for pizza!!!!

  • Mike Smith

    This is exciting. John is right, Verizon is in trouble. They have no vision and have painted themselves into a corner. As their older customers continue to die off the legacy networks have no where to go but down.

    • ugp5

      I believe AT&T is the one who has to worry. All of their debt with a focus on video/TV that their customers do not need or want.
      I think Verizon is more focused on their network, as they should be.
      I hope T-Mobile does not follow AT&T’s course.

      • Brandon

        I totally agree. Hopefully T-Mobile continues to gain new customers(especially from AT&T)

  • Phil7474

    About damn time!

  • Jay Holm

    So I finally read the article in it’s entirety, I had a long day getting situated at a new place…I didn’t know Dish had low band (600/700) spectrum….is what Dish has nationwide?

    • Shaun Michalak

      Yea.. Dish has close to the same amount of mid and low band spectrum as T-Mobile does.. That was according to an article back in 2018. So they already have enough spectrum to put up a decent network already.. This deal is only expanding the amount of spectrum that they have.

      • Jay Holm

        Wow, Dish really is a lazy, unmotivated company. . .

        • marque2

          I think they thought of the spectrum as an investment. The other possibility is they wanted to build a ground network for interactive video – as the next generation of their video satellite service – but it proved too expensive or streaming caught on so fast to make the technology obsolete.

        • (J²)

          Dish is hoarding spectrum as an asset for a potential suitor. They had no plans to put it to use. That may still happen in the near future. The company has been open to M&A for awhile.

        • izick

          Actually, they did have intentions to use it, when they made a play for majority ownership for Sprint in the early 2010’s but then SoftBank came in with a bigger number.

        • (J²)

          That was nearly 10 years ago. Also, since SoftBank was willing pay more, it implies interest was low.

        • Daniel

          6 years ago

        • (J²)

          Same points.

  • Nooooo not 800mhz but oh well they need to hurry and clear 600mhz

    • Jay Holm

      It’s ok, T-Mobile still has lots of low-band, 600/700. . .

    • zOMGLOLROFLMAOz

      If you’ve used Sprint before, 800MHz is absolutely worthless. There’s really no loss here. You get two different levels of service. If your mobile device latches onto 800MHz, it will be unusable. If it latches to B41, it’s very good.