T-Mobile/Sprint Merger Gets DoJ Approval Thanks to Dish's $5B Deal

The Department of Justice signed off on the proposed US$26.5 billion merger between Sprint and T-Mobile under an agreement that calls for Dish Network to purchase Sprint's prepaid customers and 800MHz spectrum for $5 billion. Dish, for its part, promised to build a 5G network that will cover 70% of the US population by June 2023 with speeds of at least 35Mbit/s.

The transaction is designed to position Dish as the nation's fourth wireless provider, replacing Sprint.

However, the new transaction still faces opposition from more than a dozen states. Attorneys general from New York, California, Colorado and elsewhere today reaffirmed their opposition to the merger of Sprint and T-Mobile, even with the presence of Dish. Their lawsuit, initially filed in June, is headed to trial in October.

The new merger agreement among Sprint, T-Mobile and Dish -- outlined in detail in Dish's filings with the SEC and FCC -- includes a number of complicated moving parts:

The transaction -- if it is ultimately approved by regulators and shareholders -- would bring to a close two important storylines in the wireless industry. First, and perhaps most importantly, it combines the nation's third (T-Mobile) and fourth (Sprint) largest wireless network operators into a single provider, although that company still wouldn't be as big as either AT&T or Verizon in terms of customers. However, the combined Sprint and T-Mobile will own dramatically more spectrum for 5G than either AT&T or Verizon, potentially positioning the combined company to build out a massive, super-fast 5G network.

Indeed, if their merger is ultimately approved, the combined Sprint and T-Mobile has promised to pour billions of dollars into the construction of a 5G network that would stretch across T-Mobile's 600MHz spectrum and Sprint's 2.5GHz spectrum. The combination of those two spectrum bands in 5G promises to offer broad coverage (via the propagation characteristics of 600MHz) as well as enormous capacity and significant speed (via the propagation characteristics of 2.5GHz).

Already T-Mobile has said that the merged company will offer 5G-powered, in-home Internet services to millions of Americans in what would be a direct attack on existing wired Internet providers like Comcast and AT&T.

But the transaction also appears to bring to a close another major storyline in the wireless industry: that of Dish Network's transition from a flagging satellite TV provider to an up-and-coming 5G network operator. Dish has been accumulating spectrum licenses for more than a decade now, and today sits atop spectrum holdings that rival those of Verizon. Many expected the company to eventually cash in on its spectrum adventures via a sale of its spectrum holdings to a company like Comcast or Verizon, but today's transaction positions Dish to instead put its spectrum holdings into action via the construction of a nationwide 5G network.

Whether Dish will be able to successfully challenge the likes of AT&T or Verizon in 5G remains to be seen, but Dish chief Charlie Ergen has made it clear that he's not going to chase 5G smartphone users but instead will pursue the Internet of things, including providing connections to all kinds of gadgets from robots to drones to automobiles.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano