UPDATE New Street Research (NSR) says the fight between T-Mobile (NASDAQ: TMUS) and DISH (NASDAQ: DISH) over DISH’s request to delay purchasing the 800 MHz spectrum licenses is close. However, NSR believes the DoJ is likely to side with DISH and convince the federal court where the dispute is playing out to approve the extension.
DISH has said it didn’t anticipate higher interest rates and supply chain delays when it agreed to the deal crafted by the DoJ allowing T-Mobile to acquire Sprint. NSR Policy Analyst Blair Levin points out in a client note that DISH considers the 800 MHz licenses critical to its ability to compete effectively.
T-Mobile opposes the 10-month delay. Levin notes holding onto the spectrum longer will cost the carrier “at least” $215.7 million. Delay will decrease the spectrum’s auction value, as bidders would have less time to complete build-out requirements. Holding onto the spectrum longer may prevent T-Mobile from acquiring 600 MHz spectrum that would improve its network value for consumers, he adds.
“We think that the DOJ will take TMUS’ argument about the high bar for modifying the judgment seriously but will balance it against the potential harm to competition if DISH does not have access to the 800 MHz spectrum,” notes Levin. NSR also thinks the DoJ will balance the legal arguments against the main purpose of the Final Judgement, which was to allow the T-Mobile-Sprint deal only if there was “a good probability that DISH would replace the competition lost by virtue of Sprint being acquired.”
NSR says watch what happens by September 18. That’s the date by which the DoJ and the “plaintiff states” must file if they want the court to know their views. The court is the decision maker, and it’s “highly likely” to agree with the DoJ’s position, according to the analysts. NSR points out that if the DoJ agrees with T-Mobile “or simply does not file,” the court is likely to deny the DISH request for more time.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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