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T-Mobile close to getting US okay for US$26.5 billion Sprint merger: sources
T-MOBILE US is on the cusp of securing US Justice Department approval for its US$26.5 billion merger with Sprint, after establishing the general outlines of asset sales to Dish Network, according to people familiar with the matter.
The Justice Department is hammering out final issues with T-Mobile on an agreement aimed at ensuring Dish can become a strong fourth competitor in the US wireless market, said the people, who asked to not be identified because the matter isn't public. While the sticking points aren't insurmountable, the Justice Department has yet to bless the arrangement to allow Sprint's acquisition to proceed.
T-Mobile is trying to offer just enough concessions to gain approval but not so many that it creates a formidable rival while the Justice Department is aiming to maximise competition, the sources said.
Sprint and Dish shares both jumped on Bloomberg's report. Sprint was up 1.7 per cent to US$7 at 12.35 pm in New York, while Dish climbed 2.3 per cent to US$40.07. T-Mobile rose than 1 per cent to US$75.94.
T-Mobile and Sprint have agreed to sell to Dish some airwaves and Sprint's pay-as-you-go brands, including Boost, Virgin Mobile and Sprint Prepaid, the sources said. Dish would also get a six-to-seven-year wholesale agreement allowing it to sell T-Mobile wireless service under the Dish brand.
The package would also include a three-year service agreement from T-Mobile to provide operational support as prepaid customers shift to Dish, according to one of the people.
The companies are expected to hash out the unresolved issues around network sharing within a few days, setting them up for a possible decision from the Justice Department as early as next week, they said.
CNBC first reported the details of the wholesale agreement as well as potential timing of the Justice Department's decision.
Representatives for T-Mobile, its parent company, Deutsche Telekom and the Justice Department declined to comment. A representative for Sprint didn't have an immediate response to a request for comment.
T-Mobile agreed to buy Sprint in April 2018, pitching the transaction as a way to advance the introduction of the next generation of wireless technology known as 5G, a priority of President Donald Trump.
The companies have already won the support of the Federal Communications Commission, in part by promising to deploy a 5G network that would cover 99 per cent of the US population within six years.
They still have to win over Justice Department antitrust chief Makan Delrahim, who wants the No 3 and No 4 wireless carriers to shed enough assets to lay the groundwork for a new fourth competitor.
Approval from the Justice Department could give the carriers a boost as they contend with a lawsuit filed by a group of state attorneys-general who say the deal should be blocked because it will hinder competition and raise prices.
The concessions would be a boon for Charlie Ergen, the billionaire chairman of Dish. Long aware of the inevitable decline of satellite television, he has spent billions of dollars in government auctions to amass wireless airwaves.
Gaining a wireless business and some airwaves would bring him closer to building a state-of-the-art network that can send video and other content without the need for cable or a satellite antenna. BLOOMBERG