T-Mobile US and Sprint have reportedly agreed a deal to divest selected wireless assets to domestic satellite TV giant DISH Network, CNBC reports, citing people familiar with the matter. While the precise assets included have not yet been revealed, the deal is expected to include Sprint’s pre-paid brand, Boost Mobile, alongside an unconfirmed quantity of wireless spectrum.
The agreement follows a meeting between DISH boss Charlie Ergen, Federal Communications Commission (FCC) chairman Ajit Pai and Department of Justice (DoJ) antitrust chief Makan Delrahim in mid-June. Ergen won over the officials with his reiteration that there was a ‘need for a minimum of four nationwide mobile network operators’ to maintain a healthy level of competition. CNBC’s source added that T-Mobile ‘wants to limit DISH’s spectrum capacity to 12.5%’, suggesting that wireless frequencies will figure heavily in any transaction. The cellco also wants to limit any future strategic investor in DISH to a 5% stake, wary of future M&A in the telecoms and pay-TV space.
As previously reported by TeleGeography’s CommsUpdate, the FCC gave the USD26 billion merger between T-Mobile and Sprint its approval, on the proviso that the enlarged entity divested Boost. The DoJ, however, believed that the regulator’s measures did not go far enough, hence the likely inclusion of an additional spectrum package.
TeleGeography notes that long-time wireless market aspirant DISH has been stockpiling multi-band spectrum in recent years, although its operational plans remain unclear. The potential acquisition of Boost Mobile would give it a significant leg-up in the wireless market.