The Department of Justice and the Attorneys General for five states have reached a settlement with T-Mobile and Sprint regarding their proposed merger, which requires divestitures to Dish Network that is designed to enable a viable facilities-based competitor to enter the market.
The DoJ settlement, which was supported by the state Attorneys General offices that represent Nebraska, Kansas, Ohio, Oklahoma, and South Dakota, must be approved by the U.S. District Court for the District of Columbia.
But one shadow still remains: the lawsuit in the New York district court against the merger by the 14 state attorneys general, including Colorado, Connecticut, the District of Columbia, Maryland, Michigan, Mississippi, Virginia, and Wisconsin.
“One big hurdle still to clear is the court case bought by the state AGs,” wrote Jonathan Chaplin, analyst, New Street Research, in a research note. “We wouldn’t underestimate the height of the final hurdle; the concessions to Dish were less robust than they could have been. The companies will have to convince the court that Dish really is a viable new entrant with the starting position they have, when apparently an established veteran like Sprint couldn’t make a go of it. We think odds favor the companies, but by no means a slam dunk.”
Under the terms of the proposed settlement, the New T-Mobile must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish. The proposed settlement also provides for the divestiture of 800 MHz spectrum assets to Dish. Additionally, T-Mobile and Sprint must make available to Dish at least 20,000 cell sites, hundreds of retail locations and access to the T-Mobile network for seven years.
Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division, said, “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.”
The Department and the plaintiff States said that, without the divestiture, the proposed acquisition would eliminate competition between two of only four facilities-based suppliers of nationwide mobile wireless services, which are particularly close competitors to each other for the roughly 30 percent of retail subscribers who purchase prepaid mobile wireless service.