The Federal Communications Commission may have given T-Mobile and Sprint the go-ahead to merge, but the deal remains under intense scrutiny from the Department of Justice, which believes it could be anti-competitive. But it turns out that Dish Network could be the key to making sure the merger resolves those concerns.
CNBC reports that T-Mobile, Sprint and Dish have reached an agreement by which Dish would gain access to some of the wireless spectrum owned by the merged T-Mobile/Sprint entity, possibly for a number of years. Dish could also end up walking away with the Boost Mobile prepaid brand, which is currently owned and operated by Sprint.
If T-Mobile and Sprint can convince the DOJ that handing over some of its assets to Dish would maintain the four-way competition that has defined the wireless industry in the United States, they may just get the approval they're so desperately seeking.
Still, there are a number of ways the scenario could play out. The DOJ reportedly feels Dish would have to be given full access to the resulting T-Mobile/Sprint network to maintain parity in the market, while Deutsche Telekom, which owns T-Mobile, has countered that's much too high, and that 12.5% would be a fairer share.
Theoretically, Dish would have about six or seven years to utilize T-Mobile and Sprint's airwaves; after that, it would have to move service off to its own infrastructure.
Well before any of this, Dish was angling to join Verizon, AT&T, T-Mobile and Sprint in the mobile arena for years, purchasing swaths of unlicensed spectrum to eventually build a network of its own. Or, at least, that's what everyone presumed. According to CNBC, Dish has invested more than $20 million in spectrum and has mounted considerable debt in the process. The satellite television provider will have to put its wireless assets to use by March 2020, or the FCC could strip them of it.
Thus, a scenario in which T-Mobile and Sprint give Dish a running start might be advantageous for all parties involved. T-Mobile and Sprint want to prove that there will still be healthy competition between carriers so they get the green light, and Dish needs to do something with the spectrum it has, before its $20 billion goes up in flames.
Theoretically, it's a win-win — though, again, the agreement T-Mobile, Sprint and Dish have drawn up needs to quell the DOJ's concerns. We don't know the nitty gritty of the terms, though we do know Deutsche Telekom has some restrictions in mind. Aside from that 12.5% limitation on network usage, the wireless giant would also want to ensure that a strategic Dish investor couldn't retain more than a 5% share of the combined T-Mobile/Sprint entity. Revenue sharing could also factor into the agreement.
The on-again, off-again ordeal of T-Mobile and Sprint's merger isn't a sure thing yet. That said, it seems they're inching closer to pulling it off than ever before — and it could be all thanks to the cooperation of an unlikely ally.