Home / Business / T-Mobile and Sprint Deal win Ministry of Justice thanks to Dish

T-Mobile and Sprint Deal win Ministry of Justice thanks to Dish


T-Mobile and Sprint become one.

Josh Miller / CNET

After more than a year of regulatory dispute the $ 26.5 billion acquisition of Sprint is imminent. Justice Department antitrust director Makan Delrahim said Friday that DOJ will approve the deal as T-Mobile's parent company Deutsche Telekom signs a deal to sell several Sprint assets to Dish Network and a new nationwide one Mobile operators have created.

Under the agreement, Dish will acquire Sprint's 800 MHz radio spectrum, the Sprint-Boost, Virgin Mobile and Sprint Prepaid prepaid brands, and their combined 9.3 million customers and network agreements that will enable the Dish to be used T-Mobile network enables Seven years as the company builds its own 5G network.

T-Mobile and Sprint must also grant Dish access to "at least 20,000 cell sites" as well as "hundreds of retail locations." In a joint press release, T-Mobile and Sprint announce that after completion of the sale, Dish will be able to "lease lease specific cell sites and retail locations that will be shut down by the new T-Mobile for five years." Dish will pay T-Mobile approximately $ 5 billion for the assets it acquired: $ 1

.4 billion for the prepaid businesses and $ 3.6 billion for the spectrum.

The move could change the wireless industry and shatter the place where you receive your wireless service. The deal gives Dish the tools to quickly enter the mobile business by accessing the T-Mobile network. Meanwhile, T-Mobile will merge with Sprint to become a much tougher competitor for AT & T and Verizon in the US mobile marketplace. T-Mobile has argued that the combination with Sprint will accelerate the deployment of 5G across the country and extend its customer reach and scalability to the Big Two: AT & T and Verizon.

According to T-Mobile, Sprint's prepaid businesses and customers are expected to "instantly switch to Dish in the second half of 2019, as will its more than 400 employees and the nationwide independent retail network serving more than 7,500 retail outlets." Dish said in a statement.

There remain some questions about Dish's legitimacy as a wireless player – one of the main concerns of Attorney Generals who have sued for a merger ban. But CEO John Legere offered a rare defense of an outside company.

"Dish will be a very credible annoying fourth player," Legere said on a Friday call on analysts and media.

Duplicate Impact

However, Dish's market launch is unclear as it has to wait for the completion of the T-Mobile Sprint merger before it can take over the divested assets. However, the company announces that it has a "5G broadband network capable of servicing 70 percent of the US population by June 2023".

Neville Ray, T-Mobile's Chief Technology Officer, said Dish and the other carriers could immediately access the upcoming 5G network. A decade ago, when 4G was on the rise, network operators protected its then-new network and prevented so-called virtual mobile network operators from using it. Likewise, the company will comply with all of Sprint's reseller agreements, including a contract with cable provider Altice.

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Dish has long tried to enter the mobile business. In the last frequency auctions, the value of wireless radio waves has increased billions of euros. The deadline for using these radio waves ends in March 2020, otherwise there is a risk that they will lose their license. Dish previously said it is working on a narrowband wireless Internet of Things network – such as smart thermostats, energy meters, traffic lights and security systems – though this network is not designed for mobile phones and tablets.

Under the agreement with the DOJ and T-Mobile, Dish has "requested a change in frequency licenses" to meet the new promise of establishing a 5G network covering 70 percent of the population By June 2023. [19659006Dishhasmademanypromisesforapossible5GwirelessnetworkHowevertheagreementwithT-MobilewillenableittoofferwirelesstelephoneSMSanddataservicesinthecombinedT-MobileSprintnetworkwhilebuildingitsownservice

Dish could follow in Sprint's footsteps and make aggressive offers to lure subscribers away from the new Big Three, but Sprint did not succeed in the long run. In recent years, both Sprint and T-Mobile have put pressure on AT & T and Verizon with unlimited data plans, cheaper monthly rates, and packages that added subscriptions to services such as Netflix, Hulu, Spotify, Tidal, and Amazon Prime.

"The Friday developments are more than two decades worth of work and more than $ 21 billion in frequency investment to turn DISH into a connectivity business," said Dish co-founder and chair Charlie Ergen in one Statement. "Together, these opportunities will create the foundation for our entry as the country's fourth facility-based mobile communications competitor and accelerate our efforts to launch the country's first stand-alone 5G broadband network." Customer base to better compete with larger competitors. The telecommunications business was on the order of magnitude, and a larger customer base financed investments in network upgrades. T-Mobile will maintain Sprint's 2.5GHz spectrum. The radio waves used by Sprint are already using 5G in five cities across the country. This is a valuable bandwidth as the company wants to extend 5G to a larger part of the country.

"With this merger and the associated divestiture, we are significantly increasing production by ensuring that large amounts of currently unused or underutilized frequencies are available to American consumers in the form of high quality 5G networks," Delrahim said ,

price changes?

Asked if this deal would end an era of aggressive promotions and cheaper plans, Mike Sievert, T-Mobile's Chief Operating Officer, rejected the idea.

"We will take advantage of the advanced features and pursue AT & T and Verizon as they have never seen before," he said.

T-Mobile has agreed to secure prices for the next three years, though it has not talked about Sprint's plans. Legere pointed to big things.

"We will not waste any time to clarify what this network is capable of," he said, rejecting the idea that T-Mobile would become as fat and arrogant as its rivals.

Sievert also reiterated the company's plans to supply 99% of Americans with 100 megabits per second, and Ray talked about his plans to offer 5G nationwide by next year.

Challenges still ahead

While the DOJ's decision paves the way for the T-Mobile Sprint deal, it's not yet signed, sealed and delivered.

Thirteen Attorney Generals and the District of Columbia have filed a lawsuit to block the T-Mobile Sprint Deal on the grounds that this will lead to higher prices and less competition. Although the new agreement paves the way for Dish to replace Sprint as the fourth mobile operator, it remains to be seen whether states will continue their legal action.

In addition to brokering a deal between T-Mobile and Dish, the DOJ reached an agreement with five Attorney Generals: Nebraska, Kansas, Ohio, Oklahoma, and South Dakota.

No agreement has yet been reached with New York or California to bring the action against the merger. In a statement by New York Attorney General Letitia James, the 13 states and the District of Columbia reiterated their opposition to the deal by dismissing Dish's earlier broken promises and his confidence in using the T-Mobile network for "foreseeable future".

"The promises Dish and T-Mobile made in this deal are the promises that only strong competition can guarantee," James said in a statement . "We have serious concerns that the coincidence of this new fourth mobile phone player with the government, which selects winners and losers, does not address the damage to the consumer, worker and innovation merger. "

" A market with less active competitors drives up costs consumer choice and prevent innovation, "said California Attorney General Xavier Becerra. "We want to be ready to go to court to fight for a fair, competitive and fair market for consumers across the country."

The California Public Utilities Commission must also state its blessing on the deal, and in a report from Wednesday it was said that the cable giant wanted to offer charter on Sprint assets, but has never heard of it from the DOJ . It is unclear what potential news could impact the business of T-Mobile with Sprint and Dish.

On the call, Legere said the priority was to clarify the concerns of the state-owned AGs and the California Commission. Sievert said the companies would not advance the deal without first completing the lawsuit.

Different technologies

It is also problematic to integrate two networks with different technologies. T-Mobile has a mix of 5G, 4G LTE and 3G based on GSM technology. Sprint now has 5G, 4G LTE and a 3G technology called CDMA.

For the good of business: Many popular 4G handsets, including current iPhones and Galaxy phones, provide support for the networks of both network operators. Google's Project Fi is already transitioning seamlessly between T-Mobile and Sprint for its mobile service.

But we also saw what happens when integrations are not handled properly. When merged with Nextel in 2005, Sprint catastrophically attempted to bridge both network technologies. T-Mobile was faced with a similar scenario when it bought MetroPCS, which also used CDMA technology. However, under T-Mobile's Chief Technology Officer Neville Ray, T-Mobile has smoothly separated customers from the old network. All this, of course, will happen on a much larger scale with Sprint, which has 54.5 million customers with 83.1 million T-Mobile customers.

The story was originally published at 8:30 pm PT.
Update, 11:50 am, PT: With additional commentary from executives and background information.

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