By Drew FitzGerald, Sarah Krouse and Brent Kendall
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (July 25, 2019).
The Justice Department is poised to approve T-Mobile US Inc.'s
merger with Sprint Corp. under a plan designed to create a new
wireless carrier by handing assets to satellite-TV provider Dish
Network Corp., according to people familiar with the matter.
T-Mobile, the nation's No. 3 carrier by subscribers, and No. 4
Sprint have spent weeks negotiating with antitrust enforcers and
each other over the transfer to Dish of building blocks for a
network to satisfy concerns that their more than $26 billion merger
would hurt consumers by reducing price competition.
The result is a deal that gives the satellite-TV company nine
million Sprint cellphone customers, new wireless spectrum and the
ability to operate on T-Mobile's network during a seven-year
transition period, some of the people said. Those subscribers
represent about a fifth of Sprint's customer base.
Dish would pay $1.4 billion for the Sprint customer accounts,
most of which come from its Boost Mobile prepaid brand, and $3.6
billion three years later to buy Sprint spectrum licenses in the
800 megahertz range, these people said. The right to use those
airwaves, which can travel long distances, would help Dish expand
service in rural areas. That is a top priority for the Federal
Communications Commission, another agency with authority over the
The deal, which would require Dish to offer cellphone service to
consumers, is intended to maintain competition by creating a fourth
national wireless player, along with Verizon Communications Inc.,
AT&T Inc. and the new, larger T-Mobile. However, the
satellite-TV provider would be dwarfed by the others in terms of
both subscribers and revenue.
The proposed settlement with the Justice Department also
requires that T-Mobile and Dish support a technology called eSIM,
which is software embedded in cellphones that makes it easier to
switch carriers, other people familiar with the matter said.
Providing for eSIM, which stands for electronic subscriber
identity module, could be a challenge for the companies. New
devices, including the latest iPhones, can support the digital
identifiers, but U.S. carriers, including industry leaders Verizon
and AT&T, tend to push customers toward physical SIM cards.
The Justice Department could make public a settlement with
T-Mobile and Sprint as soon as this week, though the timing remains
uncertain, some of the people said. The merger still faces a legal
challenge from several state attorneys general. Bloomberg News
reported on Tuesday some of the terms of the agreement between
T-Mobile, Sprint and Dish.
T-Mobile has scheduled its quarterly earnings release for
Thursday evening. Shares of T-Mobile rose 3.2% to $80.61 on
Wednesday, just shy of their record high. Sprint jumped 8% to
The union of T-Mobile and Sprint, years in the making, would
create a wireless company with more than 80 million U.S. customers,
closing the gap with Verizon and AT&T, which combined have
about 200 million wireless customers. It would also fulfill a
long-held goal of Japan's SoftBank Group Corp., which owns most of
Sprint, and Deutsche Telekom AG, which controls T-Mobile.
U.S. carriers have been battling for customers in the $180
billion voice-and-data market, where growth has slowed now that the
companies have rolled out unlimited data plans and most people in
the U.S. have upgraded to smartphones.
Dish has amassed vast amounts of wireless spectrum over the
years that it needs to put to use or risk losing its licenses.
Justice Department officials are focused on giving the company the
remaining pieces needed to build a nationwide mobile network.
Dish's initial plans called for a nationwide network tailored
for vehicles, sensors and other devices that business customers
might need hooked up to the internet. Its arrangement with T-Mobile
would allow the company to also serve consumers with
The satellite operator was an early opponent of the deal between
T-Mobile and Sprint. Dish hired economists who warned a merger
would hurt wireless competition. The company's FCC filings also
described how the government might counter the likely effect on
competition by crafting a fourth independent operator.
The expected federal approval for T-Mobile and Sprint caps a
14-month review of a combination that fell apart twice in the past
five years over terms of the deal or fears that the Justice
Department would object.
When T-Mobile unveiled last year the latest plan to take over
its smaller rival in an all-stock deal, executives said the pact
would get a warm reception in Washington because their combined
resources would dramatically cut the cost of mobile data, making
the wireless industry more competitive.
A panel of national security officials and the chairman of the
FCC had already blessed the deal subject to certain conditions. But
Justice Department officials reviewing the deal solely on its
antitrust effects demanded more concessions to preserve the U.S.
wireless market's four-provider structure.
A group of attorneys general from 13 states and the District of
Columbia have filed an antitrust lawsuit seeking to block the
combination, saying it would harm consumers. The companies' altered
merger plan means a trial originally scheduled to start Oct. 7 in
the U.S. District Court for the Southern District of New York will
likely be delayed.
Write to Drew FitzGerald at email@example.com, Sarah
Krouse at firstname.lastname@example.org and Brent Kendall at
(END) Dow Jones Newswires
July 25, 2019 02:47 ET (06:47 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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