T-Mobile
and Sprint Take the Next Step
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Francis Scialabba
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How
do you know when it’s official? When the Justice Department gives its
blessing.
T-Mobile
(+5.43%) and Sprint (+7.39%) finally got that validation
yesterday when DOJ officials greenlighted their more than $26 billion merger
after five years of on-again, off-again (the merger was first proposed in
June 2014).
Sprint’s taking T-Mobile’s name: Once combined, the
country’s third and fourth largest wireless providers plan to be called
T-Mobile and serve over 90 million U.S. customers. The first and second
largest providers, Verizon and AT&T, each have about 100 million wireless
customers.
But relationships take
work
And
attorneys general from 13 states and D.C. are testing this pair’s devotion.
They sued to block the
merger last month, arguing that reducing the number of big-league telecom
players limits competition and raises prices. If the marriage survives the
lawsuit, 95% of American cellphone
customers will get service from the top three U.S. operators.
The
trial is scheduled to start in October...and T-Mobile said it expects to
close the Sprint deal in the second half of the year.
The DOJ knows it’s all
about compromise
Which
is where Dish Network (+0.87%) and its sought-after airwaves come in. Under
the deal officials struck with T-Mobile and Sprint, satellite TV provider
Dish will snap up some of the pair’s divestitures and promise the DOJ a 5G
rollout.
Dish
will get about 9 million Sprint prepaid cellphone customers, which it can
move from pay-as-you-go to the more profitable postpaid model. It’ll also be
writing thank you notes for more wireless spectrum, hundreds of retail
locations, and "robust access" to the newly combined company’s
network.
Zoom out: The shadow hanging over all of this is
that coveted 5G tech. The government wants the U.S. to get to the next
wireless generation ASAP, which is why
T-Mobile promising 5G access for 97% of the U.S. population in three years.
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