Dish has been eyeing the wireless market for some time now.

James Anderson, Senior News Editor

July 24, 2019

2 Min Read
Money Bag

T-Mobile and Sprint reportedly are divesting assets to Dish Network so that the latter can build its own wireless network.

T-Mobile and Sprint agreed to a divestiture plan with the U.S. Justice Department, the Wall Street Journal reported Wednesday. Dish will acquire prepaid subscribers, wireless-spectrum licenses and temporary access to T-Mobile and Sprint’s network. Bloomberg reports that Dish paid $5 billion for the assets — $1.5 billion for prepaid mobile businesses and about $3.5 billion for spectrum licenses.

T-Mobile agreed last year that it would buy Sprint for $26 billion in a merger that combines the third and fourth largest U.S. wireless providers.

The Justice Department has committed to helping Dish in order to meet antitrust officials’ “longstanding demand” for a fourth national wireless company, according to the Journal.

Dish has purchased large amounts of wireless spectrum in recent years and drawn complaints from carriers. T-Mobile complained to the Federal Communications Commission (FCC) that Dish was hoarding spectrum without concrete plans to utilize it. The satellite provider had promised to create a 5G-enabled narrowband IoT (NB-IoT) network by 2020, but T-Mobile complained in a scathing rebuke that such a network would leave large swaths of unused spectrum.

“Dish is turning spectrum utilization on its head by making what is effectively ancillary use of spectrum the main use — a wasteful and inefficient choice that leaves the vast majority of the spectrum fallow,” T-Mobile wrote last October.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.

CNBC explored the consternation T-Mobile executives feel about Dish’s official arrival into the wireless market. Some analysts have questioned if T-Mobile is better off leaving Sprint where it is than risk the creation of a new rival.

“If Dish enters the market with a large amount of capacity and no meaningful subscriber base of [average revenue per user] to defend, they would have every incentive in the world to be a disruptive discounter,” analyst Craig Moffett wrote. “One need not believe in a follow-on Dish deal with Amazon, Google or a cable operator to see this as bad for the market, and indeed, worse than the ‘no deal’ scenario for T-Mobile.”

Wednesday’s news is an ironic throwback to 2014, when T-Mobile suggested that it would merge with Dish after Sprint abandoned plans to buy T-Mobile for $32 billion. The potential deal, however, fell through the cracks.

The T-Mobile-Sprint merger is expected to close this week.

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About the Author(s)

James Anderson

Senior News Editor, Channel Futures

James Anderson is a news editor for Channel Futures. He interned with Informa while working toward his degree in journalism from Arizona State University, then joined the company after graduating. He writes about SD-WAN, telecom and cablecos, technology services distributors and carriers. He has served as a moderator for multiple panels at Channel Partners events.

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