Home News DOJ Approves The T-Mobile-Sprint Merger But There Is Still One Thing Unexplained

DOJ Approves The T-Mobile-Sprint Merger But There Is Still One Thing Unexplained

T-Mobile-and-Sprint

The $26.5 billion merger of T-Mobile-Sprint is now so close to becoming a reality that investors are throwing money on the shares of both companies. The US Department of Justice (DOJ) approved the deal, which it did not when AT&T agreed to pay $39 billion for T-Mobile in 2011. Even the regulatory agency told the T-Mobile and Sprint executives, three years later, who would not have blessed a combination of the two wireless service providers.

But this time, the DOJ clarified that both companies would get approval if they agreed to support the launch of a new wireless operator. This would keep the competitive landscape unchanged once T-Mobile acquires Sprint. So, Dish Network will buy part of the pair’s spectrum and will have access to a minimum of 20,000 mobile sites and hundreds of retail stores. Sprint will be sold by the prepaid provider Boost Mobile together with the prepaid operator Virgin Mobile (both will go to Dish) and the same prepaid activity as Sprint. The T-Mobile-Sprint combination will remain the property of T-Mobile’s fast-growing prepaid subway operator.

The Merger cannot Be Closed Until A Decision Is Made On A Lawsuit Filed By 13 State Attorneys General

t mobile and sprint

T-Mobile and Dish were the two biggest spenders at a 600 MHz FCC low auction in 2017. The dish must use these radio waves for next March or risk losing them. The satellite content provider will sign an MVNO agreement that will allow it to sell a wireless service under the Dish name while actually using the T-Mobile network. During this time, Dish will start building its national 5G network. Once the deal is concluded, Dish Charles Ergen president will finally realize his dreams of owning a wireless operator. He tried to buy Sprint in 2013 but lost to SoftBank of Japan.

While this is certainly good news for John Legere, CEO of T-Mobile and Marcelo Claure, president of Sprint, the merger cannot be closed until a lawsuit involving 13 state attorneys general and the attorney general is decided from Washington DC.  The plaintiffs try to block the merger and the trial may now not start until December 9th. But there is nothing to stop T-Mobile and Sprint from reaching an agreement with the plaintiffs, especially now that both the FCC and the Justice Department are supporting the transaction.

“You can see by the level of concessions that we have made in terms of giving Dish access to the new network…disposing our 800 MHz spectrum, giving them access to some of our stores, some of our towers, buying our incredible brands, Boost and Virgin. I think Dish will be set to be a viable competitor.

If I’m a state attorney, I’m going to look at how is this good for my state. I’m really hoping this doesn’t turn into [a] political fight…I have a lot of faith in the state attorneys general that once they understand the consent decree, and the level of competition that’s going to exist in the market, that hopefully they will sit down and be able to reach an agreement with us.”- Marcelo Claure, Chairman, Sprint

In 2011, when AT&T failed in its efforts to buy T-Mobile, it was considered a last-minute idea in the industry. The AT&T breakup package for T-Mobile included $3 billion and 128 AWS markets, and many consider it the start of a surprising breakthrough. John Legere in September 2012, was named CEO and, under his unconventional leadership, T-Mobile became the fastest and most innovative of the major US wireless service providers. Yesterday, the company announced that it had recorded one of the best net additions of postpaid phones during the second quarter of this year.

The shares of T-Mobile rose 4.4% or from $43.52 to $83.43 in today’s news. Sprint shares also rose significantly, with a profit of 51 cents to $7.96. Each Sprint share will be exchanged for .10256 of T-Mobile shares at the close of the merger.

(Via: CNBC)

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