7/30/2019

Sprint and T-Mobile: The road ahead following Justice Department approval

"The complex settlement involved Dish Network, a maverick pay television company that had heretofore opposed the merger. Like its peers, Dish has suffered significant declines for years in its core satellite business, falling from 14 million subscribers in 2014 to less than 10 million today. Its visionary chairman, Charlie Ergen, has hatched several plans over the years for the company to break out of its death spiral, including stockpiling spectrum and exploring mergers with LightSquared, DirecTV, Sprint, and T-Mobile. But the company never quite figured out how to realize its ambitions.

Now Dish may finally have the opening it needs to break into the wireless business. Under the settlement Dish will pay $5 billion to acquire Sprint’s 9.3 million prepaid wireless customers and Sprint’s 800 Mhz spectrum. T-Mobile will allow Dish to use its network for the next seven years as Dish combines this spectrum with its own assets to build a 5G network. The agreement comes just in the nick of time for Dish, which was facing a March 2020 deadline to deploy a wireless network or risk forfeiting billions of dollars of spectrum holdings to the Federal Communications Commission. Dish has now committed to deploying a 5G network that serves 70 percent of Americans by 2023 and seeks to modify its licenses accordingly. It’s a promise with bite: if Dish fails to meet this commitment, it must pay the government a $2.2 billion penalty."