Now that chairman of Dish, Charles Ergen has realized his dream of buying a wireless service provider, let’s take a look at the transaction with T-Mobile and Sprint that just announced yesterday. First, we know that the agreement was signed with the US Department of Justice (DOJ) to grant its blessing to the $26.5 billion merger between the third and the fourth largest airline in the country. The role of the DOJ in any type of merger and acquisition agreement is to ensure that the competitive landscape is not influenced by a proposed transaction. In this specific case, the agency wanted T-Mobile and Sprint to help create a new national airline to replace Sprint.
To create what Dish calls the fourth nationwide network competitor based on facilities, after the closure of the T-Mobile-Sprint merger (which may not take place until December), Dish will purchase prepaid operations from Sprint and customers such as Boost Mobile, Virgin Mobile, and Sprint’s prepaid company. Three years after the end of the acquisition of prepaid companies, Dish will purchase 14 Sprint 800 MHz spectrum from Sprint. As reported, it will also sign a seven-year agreement with MVNO with T-Mobile that will allow Dish to sell the cellular service to consumers under their own name while building their own 5G network; Finally, Dish will complete its customers from the T-Mobile network to its 5G network once completed. The value of prepaid purchases is $1.4 billion and the spectrum purchased by the satellite content provider is valued at $3.6 billion.
Dish Must Have Its 5G Network Covering 70% Of The Country Until June 2023
Prepaid assets acquired by Dish have 9.3 million customers in all 50 states and in Puerto Rico. All those customers will become the customers of Dish when the transaction is closed, including those using the Sprint legacy network. In addition, 400 employees and over 7,500 stores will also switch to Dish.
Finally, the 800MHz spectrum purchased by Sprint will be added to the existing low bandwidth 600MHz and 700MHz Dish inventory. The company was the second-largest winner of the 600 MHz FCC radio wave auction in 2017, spending $6.2 billion compared to the $8 billion discarded by T-Mobile. The low bandwidth spectrum travels farther and penetrates buildings better than the higher frequency spectrum. The company claims that its 600 MHz and 700 MHz waves fit perfectly into the AWS-4 and AWS H Block mid-band spectrum of their band. While these mid-band radio waves may not reach the low bandwidth variety, they offer greater data capacity. Dish will negotiate an agreement to lease part of its 600 MHz spectrum to T-Mobile, while it will be closed for the first time in some towers, network equipment and retail goods that will be closed due to the merger.
“These developments are the fulfillment of more than two decades’. worth of work and more than $21 billion in spectrum investments intended to transform DISH into a connectivity company. Taken together, these opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network…The FCC and the DOJ are to be credited for laying the groundwork for an innovative 5G wireless ecosystem that will introduce new opportunities to American consumers and businesses while enhancing competition in the wireless industry.”- Charles Ergen, co-founder, and chairman, Dish Network
As part of the agreement, Dish must have its own 5G network and cover 70% of the US population by June 14, 2023. If the deadline is not met, the company will provide a voluntary contribution to the US Treasury in $ 2.2 billion amount.
Now that DOJ and FCC have approved the T-Mobile-Sprint merger, all that remains is to predict a lawsuit to stop the merger. The plaintiffs, 13 generals of the state prosecutor and the attorney general of Washington DC, can agree on an agreement. Otherwise, a trial could begin until December. In other words, don’t expect the merger to close immediately.
- Report Says A Major Problem Is Preventing The DOJ From Approving The T-Mobile-Sprint Merger
- The Merger Of T-Mobile And Sprint Could Get Final Approval Today
- According To Reports, Dish Agrees To Pay $5 Billion To Create A New Prepaid Carrier
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