By Drew FitzGerald and Sarah Krouse 

The Justice Department approved T-Mobile US Inc.'s merger with Sprint Corp. after the companies agreed to create a new wireless carrier by selling assets to satellite-TV provider Dish Network Corp.

The landmark antitrust agreement seeks to address concerns that the combination of T-Mobile, the nation's No. 3 carrier by subscribers, and No. 4 Sprint will drive up prices for consumers. It would leave more than 95% of American cellphone customers with the top three U.S. operators.

A deal brokered by the Justice Department will require Dish, which has been sitting on valuable airwaves, to build a 5G network for cellphone customers. To help it get started, T-Mobile will sell Sprint's prepaid brands to Dish and give access to the combined carrier's network for seven years.

"With this merger and accompanying divestiture, we are expanding output significantly by ensuring large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks," said Makan Delrahim, the Justice Department's antitrust chief.

Critics of the arrangement include a group of state attorneys general that broke with the Justice Department and have filed an antitrust lawsuit seeking to block the more than $26 billion merger. Five states that weren't part of the lawsuit joined the federal government in the settlement announced Friday.

"Why scramble so much to create a fourth competitor when you already have one?" said Samuel Weinstein, an assistant law professor at the Cardozo School of Law at Yeshiva University who worked previously in the Justice Department's antitrust unit.

The deal gives Dish, a satellite-TV provider, about 9 million Sprint prepaid cellphone customers and additional wireless spectrum. Those subscribers represent about a fifth of Sprint's customer base.

T-Mobile and Sprint must also give Dish access to at least 20,000 cell sites and hundreds of retail locations. The new T-Mobile must provide "robust access" to its network, the Justice Department said.

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 Communications Inc. and AT&T Inc., which each have roughly 100 million wireless customers. It also would fulfill a long-held goal of Japan's SoftBank Group Corp., which owns most of Sprint, and Deutsche Telekom AG, which controls T-Mobile.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com and Sarah Krouse at sarah.krouse@wsj.com

 

(END) Dow Jones Newswires

July 26, 2019 11:45 ET (15:45 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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