The potential merger between telecommunications giants T-Mobile and Sprint is getting closer to approval after T-Mobile and Dish reached a divestiture deal about the selling off of assets, according to a report by CNBC.
The deal is currently pending approval by the Department of Justice. The government wants to make sure the deal is enough to ensure that Dish can provide actual competition to the big three telecom providers after the $26 billion merger.
The DoJ previously said it wanted Sprint and T-mobile to sell off assets, including wireless spectrum, before the merger could be approved. The terms of the deal between Dish and T-mobile will allow Dish to use the merged companies network for six or seven years before it has to build its own.
T-Mobile parent company Deutsche Telekom wants to limit strategic investors in Dish to 5 percent, and to limit Dish’s spectrum capacity to 12.5 percent.
The DoJ wants Deutsche Telekom to give Dish unlimited access to its network, according to Reuters. Shares in the three companies went up on the news. T-Mobile shares were up 1 percent, Sprint went up 4.6 percent and Dish rallied 2.1 percent.
Some analysts worry about the lack of competition with only three large carriers, so the decision to divest with Dish has helped regulators potentially decide about the merger.
Last year, Sprint and T-Mobile announced the deal. Some who are in favor of the deal so it would help the wireless market with adoption of 5G technology, a sector currently dominated by Verizon and AT&T.
Charlie Ergen, Dish Chairman, recently met with Federal Communications Commission (FCC) Chairman Ajit Pai, as well as Makan Delrahim, the Justice antitrust chief, to talk about “the need for a minimum of four nationwide mobile network operators,” as well as the importance of maintaining healthy levels of competition in the telecommunications field.
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