The merger between Sprint and T-Mobile could be finalized at long last this week. According to a report from CNBC, approval for a deal between the two carriers could be announced as soon as Wednesday.
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As part of the Sprint and T-Mobile merger, the Department of Justice is pushing for a new fourth carrier in the United States. Today’s report says the new wireless competitor will be Dish Network, which has been spending billions of dollars on airwaves.
Because the Department of Justice is concerned about preserving competition, it reportedly plans to put minimal limitations on Dish. This means Dish Network will be free to sell an equity stake in its wireless business to whomever it desires, which could help it quickly build out its own wireless network with the necessary funding. Analysts also think that Dish will be incentivized to offer cheaper service than Sprint.
T-Mobile is said to be concerned that it doesn’t know what Dish has planned, and that its merger with Sprint could be “enriching an intelligent, highly motivated competitor.” Still, T-Mobile believes that a merger with Sprint is better than the alternative of doing nothing, the report says.
Even if Dish partners with a big-balance-sheet company and builds out a national network, losing Sprint would allow a large tech company or cable operator to buy the Sprint network and spectrum out of bankruptcy or for a cut-rate price.
Second, for every customer that signs up to Dish’s wireless network, T-Mobile will receive about half of the economics, according to people familiar with the matter. That’s the price Dish has agreed to pay to share T-Mobile’s network.
Still, despite Sprint and T-Mobile expecting to receive DOJ approval this week, it’s not certain that a deal will happen. There are clearly a lot of moving parts with this merger, and pieces could fall apart at any moment.
The full report from CNBC is definitely worth a read and can be found here.