Dish reportedly in talks to buy Boost; $6 billion deal could allow T-Mobile to merge with Sprint

Dish reportedly in talks to buy Boost; $6 billion deal could allow T-Mobile to merge with Sprint
This week could be a very pivotal one for the $26.5 billion T-Mobile-Sprint merger. With FCC approval in the bag, the Department of Justice will reportedly sign off on the transaction this week. The DOJ has been against the deal since the beginning, fearing that by reducing the number of major carriers in the states to three from four, prices will end up negatively impacting consumers. We've often disagreed with that reasoning, pointing out that a combined T-Mobile-Sprint could apply more competitive pressure to Verizon and AT&T than the pair currently faces. But we digress.

So what made the Justice Department change its mind? Well, it appears that T-Mobile and Sprint agreed to help create a new competitor in the wireless industry. To appease the FCC, T-Mobile and Sprint agreed to sell off Sprint's Boost Mobile pre-paid unit, and this also appears to be behind the 180-degree reversal at the Department of Justice. Both carriers will also divest some of their spectrum as part of an agreement with the DOJ. Originally there was talk that Amazon might be interested in Boost, and the thought of such a deep-pocketed firm owning a wireless carrier probably made the government regulatory agency very happy. But Bloomberg reports today that one of the other front-runners interested in Boost, Dish Network, is close to purchasing Boost for a sum believed to be at least $6 billion.

T-Mobile and Sprint could close their merger before July 29th

Dish Chairman Charles Ergen has long sought to enter the industry, and the company was involved in an epic two-way battle over Sprint back in 2013. Japan's SoftBank won that battle and now owns 80% of the nation's fourth-largest carrier. Bloomberg's report cites multiple sources said to be familiar with the talks. These sources do point out that nothing has been finalized and Dish could still pull out of the negotiations.

Boost has approximately 9 million subscribers, and the transaction with Dish is expected to include some of T-Mobile and Sprint's wireless spectrum. Sprint has a hoard of 2.5GHz mid-band airwaves, which it plans on using in combination with T-Mobile's low-frequency 600MHz spectrum to build out a nationwide sub-6GHz 5G network. It isn't clear how much of this spectrum any buyer of Boost would receive, and it most likely would not be enough to allow Boost to drop its MVNO status. An MVNO, or mobile virtual network operator, sells wireless service but doesn't own any of the networks it customers use. Boost, for example, currently uses Sprint's 4G LTE network. Even after jettisoning Boost, the combined T-Mobile-Sprint would still own pre-paid carriers MetroPCS and Virgin Mobile.

T-Mobile and Sprint have been eyeing each other for some time. Back in 2014, the pair floated the idea of a merger in talks with the FCC and DOJ. But both agencies told the carriers that they would not approve any deal. So even before a merger was announced, T-Mobile and Sprint decided to remain independent. And both firms started heading down different paths. T-Mobile, under the leadership of CEO John Legere, became the fastest growing and most innovative of the wireless operators. Legere turned T-Mobile into the Un-carrier, solving pain points for consumers; in August 2015, T-Mobile finally surpassed Sprint to become the third largest U.S. carrier. Meanwhile, Sprint has tried various promotions in an attempt to win over some consumers. Earlier this year the company started giving its new customers a 30-day money back guarantee and it differentiates itself from competitors by offering leasing deals on new phones.

T-Mobile and Sprint announced their $26.5 billion merger on April 29th of last year. Both firms agreed to a deadline of April 28th of this year to close the deal but then extended that deadline to July 29th.



1. seantn4

Posts: 66; Member since: Dec 11, 2018

Maybe they will finally build out their network as part of the agreement? They've been hoarding a lot of spectrum.

2. D.Aceveda

Posts: 434; Member since: Jun 30, 2012

I don't understand why selling Boost would seal the deal. Boost is an MVNO. They don't have an actual network thus how can they compete as a "4th carrier" when they are at the mercy of Tmo/Sprint. If Tmo/Sprint decided to raise the prices of their network, Boost would then have to pass those price increases to it's customers. If this article is true, Dish is literally paying 6 billion for rights to the name Boost Mobile and possibly spectrum with no network to use it on. Seriously anyone who can't acknowledge this merger will increase prices is just delusional.

3. rebretz

Posts: 116; Member since: Dec 26, 2011

Dish is actually sitting on billions of unused spectrum. They are close to reaching the time limit on use it or lose it. Buying Boost is their big chance to get in. Don't kid yourself, prices are going to rise no matter what. At&T and Verizon have already said 5G prices will be more expensive than current 4G prices and without any 5G competitor they can raise those prrices as much as they want. At least the New T-Mobile would have enough spectrum to mount a challenge the same way the current T-mobile does. Sprint is going out of business one way or another, either via a merger/acquisition or just going out of business. If Softbank or more importantly their CEO Masayoshi Son actually wanted to compete in the US wireless market it has more than enough capital to actually build out the network. So these are the options we have, let the merger happen and hope New T-Mobile acts like old T-Mobile, block the merger and let AT&T and Verizon dictate all prices for wireless in the US, which would raise the MVNO prices for both those networks and also let Sprint die a slow death and have their spectrum picked clean by the duopoly we have now.

4. Dr.Phil

Posts: 2512; Member since: Feb 14, 2011

Part of the agreement includes the purchase of spectrum that won't be needed by the Sprint/T-Mobile venture. Also, I believe there is going to be an agreement that for the next 3 years or so that Sprint/T-Mobile have to give Boost access to their network almost for free. That would be enough time for Dish to do something with the network in terms of building their own. Don't forget too that Google would be reliant on T-Mobile/Sprint as well as many other smaller MVNOs, so I doubt they would raise prices on access to their network right away. Dish, as far as I know, wants to be able to use their satellite technology for whatever network they are trying to build. So the new Boost wouldn't need towers per say, but rather would be using satellites for its network coverage.

6. tuminatr

Posts: 1179; Member since: Feb 23, 2009

That's a pipe dream, you think 5g doesn't work well in buildings wait until you have a satellite phone. Why do you think dish and DirecTV mount a satellite dish on the outside of your house? I do think this merger is going to go through. I do also think it will facilitate an increase in prices. I haven't seen the agreement/negotiations details between dish and Sprint/T-Mobil but unless it sprints network towers and backhaul its not a good deal for consumers

10. rebretz

Posts: 116; Member since: Dec 26, 2011

Actually as of 2018 Dish owned about as much low frequency wireless spectrum as T-Mobile and Verizon. The majority of it is in the Mid-Frequencies or what most of the current LTE frequencies are on.

7. mloudt

Posts: 23; Member since: Nov 14, 2014

Boost is a subsidiary brand difference between MVNO and subsidiary is that MVNO leases from owner where subsidiary wholly owns.

9. D.Aceveda

Posts: 434; Member since: Jun 30, 2012

No s*** Mr Obvious. And if Boost is sold, they will no longer be a subsidiary and will be an MVNO who has to lease it's network since they don't have one.

5. Maverick1

Posts: 33; Member since: Sep 30, 2012

Forget about T-Mobile and Sprint pulling out, if dish pulls out of this negotiations the merger is DOA!

8. Reybanz88

Posts: 102; Member since: Jul 28, 2016

I don't understand... Why do they have to give away spectrum when Dish is hoarding so much of it!? They don't have anything to give away! Sprint is already constrained in several key markets.... And so is T-Mobile.... We need all of their combined 1900Mhz and 2500Mhz spectrum to really compete in 5G for coverage and speed. They shouldn't have to relinquish any frequency... They are already selling a popular name and staple in the prepaid space.

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