Two huge issues now threaten the T-Mobile-Sprint merger

Two huge issues now threaten the T-Mobile-Sprint merger
The T-Mobile-Sprint merger, which seemed on the verge of getting approved by the Department of Justice, now faces some new hurdles. According to the New York Post, Dish Network chairman Charles Ergen could be months away from pulling the trigger on a purchase of Boost Mobile from Sprint for $6 billion. The deal, originally expected to be announced as soon as this week, was supposed to help T-Mobile and Sprint meet the DOJ's demands that the carriers help set up a new competitor. And Ergen has long wanted to control a wireless operator; he was beaten out by SoftBank in a takeover battle for Sprint in 2013.

While some reports say that Dish has obtained financing to complete the deal, others who know Ergen say that he is weeks or even months away from finalizing a purchase of Boost Mobile. Apparently, the executive is willing to wait out T-Mobile and Sprint in order to get a better deal on the purchase of Boost. But this could obviously throw a monkey wrench into the plans of the two major carriers to complete their $26.5 billion transaction. The Justice Department is concerned that by cutting the number of major U.S. wireless operators to three from four, consumers would end up paying more for wireless service. So the regulatory agency's antitrust chief, Makan Delrahim, met with T-Mobile and Sprint offering them the chance to get approval for the merger under the condition that they sell off MetroPCS, Boost Mobile or Virgin Mobile along with some wireless spectrum.

UPDATE: Four more state attorneys general have joined the original nine in a lawsuit filed in federal court that seeks to block the T-Mobile-Sprint merger. The trial might not start until October, and if a request for a temporary restraining order is granted by the judge, the deal will not close untiol a trial is completed. That could end up delaying the closing of the merger until late 2019 or even push it into 2020.

T-Mobile and Sprint had already agreed to sell Boost to help placate the FCC, and originally there was talk that Amazon was interested in the pre-paid carrier. And it still might be, especially if Ergen decides to hold back on a purchase of Boost in an attempt to get a better price. But Dish would be a better fit; it already owns some low-frequency 600MHz spectrum that it purchased two years ago. T-Mobile is currently using spectrum in the same band to help build a nationwide 5G network, but says that it needs Sprint's mid-band 2.5GHz spectrum to make the task easier and faster to complete. The wireless provider's CEO, John Legere, wrote a lengthy piece on Thursday about how important a T-Mobile-Sprint merger is to the U.S. A merged T-Mobile-Sprint would be in a great position to build a national 5G network using its sub-6GHz spectrum. These airwaves travel farther than the ultra-high band mmWave spectrum that Verizon plans on using exclusively. Legere writes that the merger needs to be approved so that the U.S. can grab and maintain a global leadership position in the upcoming 5G economy.

A temporary restraining order against the merger could be issued as soon as Friday


Investment banking firm Goldman Sachs, hired by T-Mobile and Sprint to help sell Boost Mobile, is still days away from distributing material to prospective Boost buyers. Besides Dish and possibly Amazon, other companies interested are believed to include cable firms Comcast and Altice. Comcast already owns Xfinity Mobile, an MVNO that uses Verizon's 4G LTE network.


Besides a possible delay in a purchase of Boost Mobile by Dish, some other bad news is reportedly coming T-Mobile and Sprint's way. A federal judge in Manhattan is expected to issue a temporary restraining order that would block the T-Mobile-Sprint merger until a trial is completed. The attorneys general from nine states and the District of Columbia have sued to block the deal. Experts say that T-Mobile and Sprint would have a better chance of winning the suit if they could show that a new competitor is being created with the purchase of Boost Mobile.

The original deadline to complete the merger was April 28th and was extended until July 29th. A second extension will apparently be necessary.

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8 Comments

1. Dr.Phil

Posts: 2386; Member since: Feb 14, 2011

Dish could end up being on the losing end. If a company like Amazon buys Boost and Dish doesn’t utilize their spectrum, they lose it. Remember, they have by March 2020 to build a network that utilizes 70% of their license territory or they forfeit it. So the real gambler here is Dish.

2. det_bradlee

Posts: 162; Member since: Jun 08, 2015

Unless they get another extension. And another. And another.

3. Eclectech

Posts: 351; Member since: May 01, 2013

No, it appears more of a game of chess. If the merger is derailed (as Dish prefers) there's still a chance Dish could merge with Sprint. Absent that, I imagine Dish could line up a buyer for the spectrum before the deadline. Amazon and Comcast would be a poor fit for Boost Mobile as both would treat it like a pet project instead of giving it the attention it needs.

4. DeJean7361

Posts: 1; Member since: Jun 21, 2019

I have tried to send a Tweet to John Legere and emailed US Cellular, who tout to be the Number 5 Carrier in the U.S. that the DOJ should incentivize US Cellular to take their sales Nationally, and not just for a region of the country they service. Starting with online sales and building out their Brick & Morter locations over time, they could move into the #4 spot for a National Carrier, and the beauty of them doing so is their legacy Network is CDMA-the same as Sprint and "Boost" which would be a Perfect fit for a prepaid carrier brand for U.S. Cellular. This combination would be a win-win for T-Mobile/Sprint to complete their merger and satisfy the D.O.J. requirements for a 4th US Carrier(already in existence) and then U.S. Cellular, while growing revenue from expanding to National Sales, work on building out their 5G in certain rural market places as well, and reselling their Boost(if they were to purchase from Sprint) prepaid under their Parent Umbrella.

6. tuminatr

Posts: 1125; Member since: Feb 23, 2009

Maybe, but everyone seems to be forgetting carrier = having their own network.

8. JLowe1985

Posts: 3; Member since: May 10, 2019

Up until Dec of last year I worked for US Cellular for 13 years. In the areas they service their signal is exceptional. When it comes to roaming they fall extremely short. You get around 1/2 GB high speed data then throttled. That and the fact that their pricing is the same as Verizon for WAY LESS coverage and they are always last to adopt changes. They are extremely prideful and unlikely to accept the offer if extended. I hate that they advertise as a national carrier when they are in reality a regional carrier with roaming agreements.

5. Godlymansean

Posts: 337; Member since: Apr 14, 2017

Seems like its just not going to happen lol but so hard to say. We can only get so much information on everything.

7. Critical54

Posts: 36; Member since: May 04, 2016

Seems like everyday someone/something is trying to stop this merger. Next they'll be saying "You can't merge until you give me a back massage!"

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