The Department of Justice (DoJ) is inching closer to approving a merger between the No. 3 and No. 4 telecom companies, T-Mobile and Sprint, according to a report by Bloomberg.
The merger will cost around $26.5 billion, and the DoJ approval is more likely now that T-mobile and Sprint have established outlines for how they’re going to sell assets to Dish Network to help it become a competitor.
T-mobile wants to give up as little as possible so that it doesn’t make Dish too good of a rival, and the DoJ wants Dish to get enough assets so that it can be.
Shares in Sprint and Dish popped on the news. Sprint went up 1.7 percent and Dish rose 2.3 percent. T-Mobile saw a smaller bump of less than 1 percent.
T-Mobile and Sprint have said they will sell off assets like Sprint’s Boost, Sprint Prepaid and Virgin Mobile brands. Dish would get to use T-Mobile’s service for about seven years, until it built its own infrastructure. There would also be an agreement that T-Mobile would give Dish operational support while customers switched over to Dish.
A decision could come as early as next week. T-Mobile agreed to purchase Sprint last year in April, and it said the merger would aid in speeding up the implementation of upcoming 5G technology.
The Federal Communications Commission already supports the deal, since the 5G network would blanket 99 percent of people in the U.S.
A group of state attorneys have said the deal should be blocked because it would harm competition in the sector and cause prices to rise. DoJ Antitrust Chief Makan Delrahim wants the companies to lose enough assets so Dish has a viable chance at being No. 4 in the telecom realm.
The chairman of Dish, Charlie Ergen, has been spending billions to procure wireless airwaves, as it’s been reported that he knew the decline of satellite TV was coming.