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.

"The remedies set up Dish as a disruptive force in wireless" with the pieces needed for the company to have a network that is ready to go, Makan Delrahim, the Justice Department's antitrust chief, said in a news conference.

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.

Shares of T-Mobile rose on the news and are trading near all-time highs. Sprint shares also were higher. Dish, whose stock price has slumped this week on news of the arrangement, were up Friday.

Federal Communications Commission Chairman Ajit Pai, who had previously backed the deal, said Friday the Justice Department settlement, coupled with T-Mobile and Sprint's earlier commitments to deploy a nationwide 5G network, will preserve competition and advance U.S. leadership in rolling out next-generation networks.

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 Americans have upgraded to smartphones.

The federal approval for T-Mobile and Sprint caps a more than yearlong 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.

The Justice Department, under the Obama administration, told the companies that shrinking from four to three national providers was anticompetitive. The companies tried again under Trump appointees to push the deal through, ultimately agreeing to divest assets to Dish to win approval.

In its agreement with the government, T-Mobile promised not to raise prices for three years and cover 97% of the U.S. population with 5G service in three years.

T-Mobile has been adding millions of customers at the expense of its rivals, pushing unlimited data plans and lower prices than the incumbents. Sprint, despite owning valuable airwaves, has been shedding millions of subscribers and has struggled to be profitable.

T-Mobile surpassed Sprint to become the No. 3 player by subscribers and argued the acquisition of the smaller carrier's airwaves would help speed its deployment of a 5G network so that it could better compete with Verizon and AT&T.

Dish, which generated $13.6 billion in annual revenue last year, had about $13 billion of net debt before the deal. It will need to shell out billions of dollars in the coming years to absorb the wireless carriers' cast-off assets, build its own network and vie for customers.

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

 

(END) Dow Jones Newswires

July 26, 2019 12:14 ET (16:14 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
Deutsche Telekom (XE:DTE)
Gráfica de Acción Histórica
De Jul 2020 a Ago 2020 Haga Click aquí para más Gráficas Deutsche Telekom.
Deutsche Telekom (XE:DTE)
Gráfica de Acción Histórica
De Ago 2019 a Ago 2020 Haga Click aquí para más Gráficas Deutsche Telekom.