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T-Mobile and Sprint have agreed to sell several badets to Dish Network Corp as a prerequisite for approval, paving the way for the creation of a new wireless company, the Justice Department said. The carriers have promised to deploy a 5G network covering 97% of the US population by three years and 99% here six years.
"The appeals make Dish a disruptive force in wireless," said Makan Delrahim, head of the antitrust department at the Justice Ministry.
In addition to the spectrum, Dish buys the prepaid activities of Sprint, Boost and Virgin. T-Mobile needs to provide Dish with access to its mobile network for seven years, which is developing its own 5G network.
Delrahim said that Dish was paying between $ 5 billion and $ 6 billion for the badet and that there were penalties if the company did not honor its commitments.
"Today is a whole new day," said Marcelo Claure, executive chairman of Sprint, at Bloomberg TV. "This brings us closer to the final step, and we want to build the best 5G network that the United States will need to run the 5G."
Ministry of Justice approval brings Sprint and T-Mobile closer to $ 26.5 billion merger and gives carriers a significant boost as they fight a lawsuit by a group of states that believe the deal should be blocked as it would hurt consumers.
If the states decide to pursue the dispute, they will have to convince a judge that the deal with Dish to establish a new wireless service provider does not go far enough to solve the problem of harm to competition from the merger.
The states wrote Thursday to a New York judge complaining about what they said was a lack of transparency regarding Dish 's draft agreement, which they said could be arranged for "l'. "hinder" as a competitor.
Legislators and consumer rights advocates have also criticized the combination of T-Mobile and Sprint, number three and four wireless operators in the United States, who believe that this will result in higher prices and lower costs. innovation in an already concentrated market. . The agreement leaves only two other national operators: Verizon Communications and AT & T.
Yet, by acquiring the Sprint spectrum, T-Mobile will have nearly twice the wireless capacity of any other carrier. According to Jonathan Chaplin, an badyst at New Street Research, this should drive down prices for subscribers by halving the cost per gigabyte of the business.
The Dish agreement aims to allow the merger while maintaining the services of four domestic wireless providers, a long-standing requirement of the Department of Justice. To operate, Dish, the second largest US provider of satellite television, will have to create a national network.
The company has billions of dollars worth of unused airwaves, but has no experience selling phones or operating a mobile service.
T-Mobile President and CEO John Legere – who has turned the company into a fierce competitor by eliminating annual contracts and offering unlimited data plans – is contesting rising prices. He insists that by buying Sprint, he will be able to better compete with industry leaders, Verizon and AT & T, for the benefit of consumers.
The approval of the Department of Justice allows Sprint and T-Mobile to enter into an agreement with which they have been flirting for years. In 2014, senior officials from the Department of Justice and the Federal Communications Commission (FCC) pushed back a corporate consolidation effort.
The carriers returned in 2018, hoping to receive a more favorable reception from the Trump administration. In May, they secured the support of FCC President Ajit Pai by promising to deploy a fifth generation wireless network.
Pai said he would present "soon" a draft order that will follow the DoJ 's filings. He said the agreement "will advance US leadership in 5G and protect competition".
Bloomberg
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