Dish Network has tough road to become competitive mobile carrier

Dish Network has tough road to become competitive mobile carrier

T-Mobile's mega-merger with Sprint can move forward, the Justice Department said Friday, paving the way for an unprecedented combination of America's third- and fourth-largest wireless providers.

After weeks of negotiations, the parties have hammered out an agreement under which Dish will pay about $1.5 billion for prepaid mobile businesses and roughly $3.5 billion for spectrum, said the people, who asked not to be identified because the details are still private. In addition, the companies agreed to negotiate on providing Dish access to T-Mobile's 600 MHz spectrum. Dish will get access to the new T-Mobile's network for seven years while it builds its own 5G network. Mergers between direct competitors have historically had a higher bar to clear at the Justice Department. No less than 14 state attorneys general filed a lawsuit in June seeking to stop the merger claiming that it would lower competition and slap an extra $4.5-billion tab on customers. But critics argue the tie-up will lead to higher prices and less innovation, and the merger may not close until a multi-state lawsuit to block the deal is resolved.

"This arrangement does not offer cellphone users a viable fourth competitor in the wireless market", Turner said.

"The remedies set up Dish as a disruptive force in wireless", said Makan Delrahim, the head of the Justice Department's antitrust division, during a briefing with reporters.

Dish is buying some of the spectrum Sprint owns in the 800-megahertz frequency band.

"T-Mobile and Sprint are asking Americans to trust that this new mega corporation will act directly against its own economic interests by helping transform DISH into an independent competitor that rivals this new company", James added.

An antitrust lawsuit from several states, including NY and California, meant to block the T-Mobile-Sprint merger still needs to be sorted out.

"A new mobile wireless entrant that starts with zero postpaid subscribers and that must rely on its much bigger rival, the new T-Mobile, just to operate is not a competitor". Sprint, strained by debt and a run-down brand, now gets to join a superior operator on healthier footing - and Son gets a piece of it. SoftBank is retaining 27% economic ownership of the combined entity, while T-Mobile's German parent, Deutsche Telekom AG, will own 42%. They also worry that eliminating a major wireless company will immediately harm consumers by reducing competition and driving up prices for cellphone service. Dish has none of that, although the settlement gives it the option of taking over some stores and cell sites that T-Mobile ditches over the next five years.

T-Mobile shares jumped 5% in afternoon trading Friday, while Sprint stock rose almost 8%. This was even something T-Mobile was quick to point out when Dish was initially offering objections to the competition-eroding deal.

They also need formal approval from the Federal Communications Commission, whose chairman has said he supports the tie-up. Quaker Capital Investments Llc who had been investing in T Mobile Us Inc for a number of months, seems to be less bullish one the $69.39 billion market cap company.

Pai said he will present a draft order "soon" that would follow the DOJ's filings.

This merger will make the "new" T-Mobile large enough to actually compete with Verizon and AT&T.



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