As a condition of the approval, the combined entity has agreed to sell Sprint’s Boost Mobile, Virgin Mobile and Sprint-branded prepaid mobile services to Dish Network for $1.4 billion.
The merged company, to be known as T-Mobile, will be a larger rival to AT&T and Verizon, though regulators pushed for the divestiture of assets with an eye toward preserving competition. Dish had already been accumulating spectrum and stating plans to build a wireless network, though some analysts and policy experts have wondered if it will become a legitimate No. 4 contender anytime soon.
Several state attorneys general in 14 states and the District of Columbia had sued to block the deal, which they say will raise wireless prices for customers.
T-Mobile CEO John Legere called the outcome with the DOJ a “win-win for everyone involved.” The original merger plan announced last April, he said, promised $43 billion in synergies. “We are pleased that our previously announced target synergies, profitability and long-term cash generation have not changed,” he said in a statement. “Today marks an incredibly important step forward for the New T-Mobile. We are ready to bring this supercharged Un-carrier to consumers and businesses across the country, and this milestone brings us much closer to making that vision a reality.”
Sprint Executive Chairman Marcelo Claure called it “an important day for our country and, most important, American consumers and businesses.”
Ajit Pai, chairman of the Federal Communications Commission, released a statement in praise of the settlement. “The commitments made to the FCC by T-Mobile and Sprint to deploy a 5G network that would cover 99% of the American people, along with the measures outlined in the [DOJ] consent decree, will advance U.S. leadership in 5G and protect competition,” Pai said. The chairman added that he will circulate a draft order advocating for FCC approval of the deal.
On Wednesday’s AT&T’s conference call with Wall Street analysts to discuss the company’s second-quarter results, CEO Randall Stephenson was asked about the Sprint-T-Mobile deal as well as the entry of a new player led by Dish chairman Charlie Ergen. He said he wondered “what level of comfort [state attorneys general] take that the antitrust concerns and fix is Charlie Ergen coming into the wireless business that’s been decades in the making.” Ultimately, though, he added, “it doesn’t change anything we’re doing.”