DOJ and T-Mobile reportedly reach "rough agreement" on merger with Sprint

DOJ and T-Mobile reportedly reach
Approval from the Department of Justice (DOJ) is one of three remaining roadblocks preventing T-Mobile and Sprint from closing on their $26.5 billion merger that was first announced on April 29th, 2018. According to a report from CNBC, the DOJ  has reached a "rough agreement" with T-Mobile; the regulatory agency will allow the merger to go through as long as T-Mobile and Sprint agree to help make Boost Mobile the fourth major U.S. carrier replacing Sprint. To win FCC approval for the transaction, T-Mobile already agreed to divest itself of the pre-paid wireless provider, freeze prices for three years following the close of the deal, and build out its 5G network to cover 97% of the U.S. over the same time period.

Because the DOJ is concerned with competition, it has focused on the 25% drop from four major U.S. carriers to three that would happen if the merger closes. That, the agency fears, would allow prices to rise throughout the industry. The theory is that by selling Boost Mobile and some spectrum to Dish Network for a rumored $6 billion, Boost would be able to keep Verizon, AT&T, and the New T-Mobile in check as far as pricing is concerned.

But the DOJ wants T-Mobile parent Deutsche Telekom to sweeten the pot to help convince Dish Chairman Charles Ergen to pull the trigger on the deal. The Justice Department wants T-Mobile to give Dish unlimited access to the carrier's network for an MVNO agreement. A mobile virtual network operator (MVNO) is one who offers cellular service to the public without owning the network being used. T-Mobile wants Dish's access limited to 12.5% of the carrier's network. As part of the agreement, Dish will have an MVNO agreement with the combined T-Mobile-Sprint for six or seven years before it will be forced to move to its own 5G network. This will cost Dish billions of dollars to build and the satellite content provider says that it would like to find a partner to share the costs. Dish does happen to be sitting on spectrum of its own that it will lose unless it is in use by next March.

DOJ and T-Mobile said to have reached a "rough agreement"


T-Mobile also is concerned that a company with deep pockets like Amazon (which itself has expressed some interest in buying Boost) and Google will make a huge investment in Dish and quickly ramp up Boost to challenge the New T-Mobile. To prevent this scenario from taking place, T-Mobile wants to limit any strategic investment in Dish to a 5% stake as part of an agreement with the DOJ.


Earlier today, CNBC's David Faber reported that the DOJ and T-Mobile had agreed on "a rough agreement" that would see Dish buy Boost Mobile and additional spectrum from the combined T-Mobile-Sprint. A revenue-sharing agreement is also said to be part of the deal.

Once the DOJ signs off, approval is still needed from the California Public Utilities Commission. And the last hurdle involves a lawsuit filed by 14 state attorneys general. The suit argues that the merger will lessen competition in the industry and raise prices, but it won't go to trial until October. Last month, there was a concern on the part of T-Mobile and Sprint that the judge in the case would issue a temporary restraining order preventing the merger from closing until the trial comes to an end. Both wireless providers already signed one extension that calls for a July 29th deadline to close on the merger. The previous deadline was set for April 28th. Both companies might need to sign another extension.

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7 Comments

1. semipro1337

Posts: 113; Member since: Oct 01, 2012

So, this is a problem for the DOJ, but ATT buying Dish Network (or is it the other way around?) Is ok? That would make 1 satellite TV provider. How is that cool?

2. ibap

Posts: 867; Member since: Sep 09, 2009

Sprint once merged with another company using different technology, and it was a disaster, both at the corporate culture level, and the technology level. While most of the rest of the world is GSM, Sprint and Verizon remain CDMA. Does the DOJ think that Legere is going to maintain the CDMA network that belongs to Sprint? Is there any mention of this being considered?

3. seantn4

Posts: 54; Member since: Dec 11, 2018

CDMA is on the way out. LTE is all run on GSM. Verizon is turning off their CDMA network at the end of this year. Sprint has not released a timeline on theirs yet. (Probably due to merger talk).

5. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

Cdma can be repurposed to gsm and all phones operate on all frequencies. Tmobile and sprint used by Google fi is a excellent example of this. The problem is that after 3 years expect no competition and price hikes. How foolish some of you sheeple are. I own fi for years and can tell you it can work. Regardless of all the noise I had better coverage through Sprint...Tmobile had faster speeds unless I was in NYC.

6. seantn4

Posts: 54; Member since: Dec 11, 2018

All phones do not work on all frequencies. I work at sprint, have to tell people all the time that their phones aren't compatible with our network. Especially any phones from ATT even their iPhones.

7. tuminatr

Posts: 1143; Member since: Feb 23, 2009

I have made this statement a few times GSM is an association it did refer to a specific TDMA based 2g technology. Sprint and Verizon are part of the GSMA. LTE is the 4g technology that the GSMA (GSM Association) has decided to use for 4g and they have all agreed to 5g tech. Verizon is essentially done with their conversion and CDMA is not needed for the vast majority of their customers. As for Sprint, I believe they are holding on any changes if they merge with T-mobile for the most part sprints network will be turned off. I also want to mention CDMA is on its way out but not because it was bad it's because it is 3g technology.

4. Toyoman24

Posts: 42; Member since: Aug 31, 2017

Whiny DISH network. Cheap TV now Cheaper phones with crappy service HAHAHHA good luck

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