By Drew FitzGerald, Sarah Krouse and Brent Kendall 

This article is being republished as part of our daily reproduction of 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 merger.

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 $7.66.

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 cellphones.

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, Sarah Krouse at 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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