DOJ OKs T-Mobile-Sprint; Requires Divestiture Package


The Department of Justice said Friday it and the Attorneys General for five states reached a settlement with T-Mobile and Sprint concerning their proposed $26B merger. The settlement requires what the DOJ characterized as a “substantial” divestiture package in order to enable a viable facilities-based competitor to enter the market.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest prepaid business, including Boost Mobile, Virgin Mobile and Sprint prepaid, to Dish Network. 

The proposed deal also calls for the divestiture of certain spectrum assets to Dish. Dish will pay T-Mobile approximately $5 billion for the assets it is acquiring: $1.4 billion for the prepaid businesses and $3.6 billion for the spectrum.   

In addition, T-Mobile and Sprint must make at least 20,000 cell sites available to Dish and hundreds of retail locations, according to the DOJ. T-Mobile must also provide Dish with what it calls “robust access” to its network for seven years while Dish builds its own 5G network. 

Between the transaction and required divestitures, “We are ensuring that large amounts of unused or underused spectrum are made available to consumers in the form of high-quality 5G networks,” said Assistant Attorney General Makan Delrahim of the DOJ’s antitrust division. The settlement provides Dish with the assets and transitional elements necessary to become a facilities-based mobile network operator, he added. “In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint and Dish have made to the FCC.” (More on that here)

A major sticking point in the months-long negotiations was a lawsuit filed by several state attorneys general, seeking to block the deal on anti-competitive grounds. Friday, state attorneys general from Nebraska, Kansas, Ohio, Oklahoma and South Dakota signed onto the DOJ agreement.

However, T-Mobile and Sprint still face an ongoing lawsuit from 13 state attorneys general and the District of Columbia seeking to block the deal. The merger cannot be finalized until after that case is resolved. The trial is set to begin on October 7, but that date could be pushed back until December 9, given the structural changes to the merger announced Friday.

July 29, 2019

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