Agreement between T-Mobile and Sprint: the Ministry of Justice awarded by OK

After more than a year of regulatory battles, T-Mobile's takeover of Sprint to the tune of $ 26.5 billion is it close to happening. Justice Department Chief of Justice Department Makan Delrahim said Friday that the DOJ will approve the deal because T-Mobile's parent company, Deutsche Telekom, had signed an agreement with sell several Sprint badets to Dish Network, creating a new wireless service provider nationwide.

Under the agreement, Dish will acquire Sprint's 800 MHz wireless spectrum, prepaid brands from Sprint-Boost, Virgin Mobile and Sprint prepaid – and their combined 9.3 million customers, as well as network agreements that will enable at Dish to use the T-Mobile network for seven years. years while building his own 5G network.

T-Mobile and Sprint will also have to give Dish access to "at least 20,000 cell sites" as well as "hundreds of retail outlets". In a joint press release, T-Mobile and Sprint say Dish will be able to "take leases for certain cell sites and retail outlets that will be decommissioned by the new T-Mobile for five years" after closing of the badignment.

Dish will pay T-Mobile about $ 5 billion for badets acquired: $ 1.4 billion for prepaid activities and $ 3.6 billion for spectrum.

This move could reshape the wireless industry and move where you get your wireless service. The deal gives Dish the tools to quickly enter the wireless business by accessing the T-Mobile network. T-Mobile, meanwhile, will partner with Sprint to create a much tougher competitor for AT & T and Verizon in the US wireless market. T-Mobile argued that its badociation with Sprint was going to overload its 5G rollout across the country and expand the reach of its customers and scale to match Big Two: AT & T and Verizon.

At the end of the transaction, which, according to T-Mobile, is expected to take place in the second half of 2019, Sprint's prepaid businesses and customers will immediately move to Dish, along with the more than 400 employees and the network. independent national retail that supports more suppliers. of 7,500 outlets, "Dish said in a statement.

There remains some questions about Dish's legitimacy as a wireless player – one of the main concerns of state attorneys general who sued to block the merger. But CEO John Legere has offered a rare defense of an outside company.

"Dish will be a very credible fourth disruptive gamer," Legere said during a call to badysts and media on Friday.

Double impact

However, it is unclear exactly when Dish will enter the market, as it has to wait until the end of the T-Mobile-Sprint merger before it can take over the divested badets. However, the company has announced that it will have a "5G broadband network capable of serving 70% of the US population by June 2023".

T-Mobile's chief technology officer, Neville Ray, said Dish and other wireless resellers will be able to immediately access its next 5G network. A decade ago, when 4G was on the rise, telecom companies were protecting its new network, preventing mobile virtual network operators from using it. Similarly, the company will honor all resale agreements entered into by Sprint, including an agreement with the Altice cable provider.

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Dish has been looking for a long time to get into the wireless. He has accumulated billions of dollars over the air in the last spectrum auctions, with a deadline of March 2020 to use this information or risk losing his license. Previously, Dish worked on a narrow-band wireless network for "Internet of Things" devices, such as smart thermostats, energy meters, traffic lights and security systems, although this network is not designed for mobile phones and tablets.

As part of the agreement between the DOJ and T-Mobile, Dish claims to have "requested that its spectrum licenses be changed" to reflect its new promise to deploy a 5G network covering 70% of the population of D & T. Here June 2023..

Dish has made a lot of promises for a possible 5G wireless network. But thanks to the T-Mobile agreement, it will be able to offer call, SMS and wireless data services on the T-Mobile-Sprint combined network while developing its own service.

Dish could follow in Sprint's footsteps with aggressive offers to try to seduce his subscribers away from the new Big Three, but this piece did not work for Sprint in the long run. But in recent years, Sprint and T-Mobile have been putting pressure on AT & T and Verizon with unlimited data plans, cheaper monthly rates, and plans that added subscriptions to services such as Netflix, Hulu, Spotify, Tidal and Amazon Prime.

"Friday's developments are the culmination of more than two decades of work and more than $ 21 billion in spectrum investments to turn DISH into a connectivity business," said Dish's co-founder and president. Charlie Ergen, in a statement. "Taken together, these opportunities will set the stage for our entry as the country's fourth-largest wireless competitor in facilities-based wireless and accelerate our work for the launch of the country's first 5G stand-alone broadband network."

T-Mobile, meanwhile, gets the size and the customer base needed to better compete with its larger rivals. The telecommunications sector has been dependent on the scale of its operations, with a larger subscriber base to fund upgrades to the network. T-Mobile will retain Sprint's 2.5GHz spectrum, the radio waves Sprint already uses to deploy 5G in five cities across the country. This is a valuable spectrum band as the company plans to transfer 5G to a larger part of the country.

"With this merger and the accompanying divestiture, we are significantly increasing production by ensuring that large amounts of currently unused or underutilized spectrum are made available to US consumers in the form of 5G networks. high quality, "Delrahim said.

Price changes?

When asked if this deal would end an era of aggressive promotions and cheaper plans, T-Mobile's Chief Operating Officer Mike Sievert rejected the idea.

"We will take advantage of improved capacity and use AT & T and Verizon like never before," he said.

T-Mobile has agreed to block prices for the next three years, although it has not yet talked about Sprint's plans. Legere hinted at great things to come.

"We are not wasting time specifying what this network is capable of," he said, also dismissing the idea that T-Mobile would become big and arrogant like its rivals.

Sievert also reiterated the company's plans to provide 99 megabits per second coverage for 99 percent of Americans, and Ray spoke of its plans to offer 5G nationwide by the year. next.

Challenges remain to come

Although the Justice Department's decision simplifies the T-Mobile-Sprint agreement, it has not yet been signed, sealed and delivered.

Thirteen attorneys general of the states, as well as the District of Columbia, filed a Multi-state trial to block T-Mobile-Sprint agreement on the grounds that this will result in higher prices and less competition. Although the new deal allows Dish to replace Sprint as the fourth largest mobile operator, it remains to be seen whether states will pursue their lawsuits.

In addition to negotiating an agreement between T-Mobile and Dish, the DOJ also has an agreement with five attorney general offices: Nebraska, Kansas, Ohio, Oklahoma and South Dakota.

It has not yet reached an agreement with New York or California, which are leading the lawsuit against the merger. In a statement issued by the Attorney General of New York State, Letitia James, the group of 13 states, as well as the District of Columbia, reinforced their opposition to the agreement, citing previous unfulfilled promises. Dish's outfits and his reliance on T-Mobile's network for "the foreseeable future."

"The promises made by Dish and T-Mobile in this deal are the kind of promises that only solid competition can guarantee," James said in a statement.. "We are seriously concerned that bringing this fourth player into the mobile market, with the government nominating winners and losers, does not correct the damage done by the merger to consumers, workers, and innovation."

"A market with fewer active competitors increases costs, reduces consumer choice and slows down innovation," said California Attorney General Xavier Becerra. "We intend to be ready to stand trial in order to fight for a fair, competitive and fair market for the country's consumers."

The California Public Utilities Commission must also endorse this agreement. A report revealed on Wednesday that cable giant Charter wanted to bid for Sprint's badets, but never heard of the DOJ. It's hard to know what consequences the news might have on T-Mobile's contracts with Sprint and Dish.

During the call, Legere said that the priority was to solve the problems of state attorneys general and the California commission. Sievert stated that the companies would not advance the agreement without terminating the dispute beforehand.

Different technologies

It is also necessary to integrate two networks with different technologies. T-Mobile is a mix of 5G, 4G LTE and 3G based on GSM technology. Sprint, meanwhile, has 5G, 4G LTE and 3G technology called CDMA.

Working for business: Many popular 4G handsets, including the new iPhone and Galaxy phones, support the networks of both operators. Google's Project Fi already seamlessly switches between T-Mobile and Sprint for its mobile service.

But we've also seen what happens when integrations are not handled properly. Sprint made a disastrous attempt to combine the two network technologies when it merged with Nextel in 2005. T-Mobile faced a similar scenario by buying MetroPCS, which also used CDMA technology. But with Neville Ray, technical director of T-Mobile, T-Mobile has allowed its customers to leave the old network smoothly.

Of course, all of this will happen on a much larger scale with Sprint, which has 54.5 million customers to reach 83.1 million T-Mobile.

The story was published at 8:30 in the morning.
Update, 11:50 PT: To include additional comments and background information.