Partnerships / Acquisitions

DOJ Discloses Terms Of Agreement In Sprint, T-Mobile Merger

DOJ Shares Agreement In Sprint, T-Mobile Merger

The Department of Justice (DOJ) said on Friday (July 26) that it has come to an agreement on the merger between Sprint and T-Mobile, which is worth $26 billion, according to a report by CNBC.

Sprint will let go of Boost Mobile, Virgin Mobile and its prepaid phone operations, and both companies will let go of wireless spectrum so that it can be used by Dish Network. This will allow the company to become a viable competitor, which is an important part of the deal.

Dish will get at least 20,000 cell sites and hundreds of retail stores. It will also have access to T-Mobile’s network for a period of seven years.

Makan Delrahim, head of the DOJ’s antitrust division, said these stipulations were instrumental in the closing of the merger. Without them, he said, the merger would “substantially harm competition.”

“Americans’ access to fast, reliable and affordable wireless connectivity is critically important to our economy and to every American consumer and to their way of life,” Delrahim said. The Dish agreement, he went on, would make it a “disruptive force in wireless.”

Dish also made some moves of its own in its push to establish itself as a viable wireless alternative. It made a deal with the Federal Communications Commission (FCC) on the establishment of a 5G broadband network that would cover about 70 percent of the United States by June of 2023. If it doesn’t hit that deadline, the company will owe the U.S. Treasury in the neighborhood of $2.2 billion.

The DOJ’s announcement doesn’t mean smooth sailing for the merger, however. There is still the issue of a lawsuit from a group of state attorneys who oppose the deal on anti-competitive grounds. State attorneys from Nebraska, Kansas, Oklahoma, South Dakota and Ohio have all signed the agreement. However, there are still 13 state attorneys general as well as the District of Columbia who do not support the deal.

The merger won’t be completed until that case is finalized. Although the trial was set for October 7, the date could be pushed back to as late as December because of the new changes to the structure of the deal.

“We’re reviewing the announced settlement, but our bottom line remains the same: protect consumers and competition,” said Xavier Becerra, a spokesperson for California’s Attorney General.

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