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Dish Agrees to $5 Billion Deal for Wireless Assets
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Dish Agrees to $5 Billion Deal for Wireless Assets
(Bloomberg) -- Satellite-TV provider Dish Network Corp. has agreed to pay $5 billion for wireless assets in a deal with T-Mobile US Inc. and Sprint Corp., setting the stage for the Justice Department to approve the $26.5 billion merger of the mobile-phone carriers, according to people familiar with the matter.After weeks of negotiations, the parties have hammered out an agreement under which Dish will pay about $1.5 billion for prepaid mobile businesses and roughly $3.5 billion for spectrum, said the people, who asked not to be identified because the details are still private. Under the terms of the deal, Dish can’t sell the assets or hand over control of the agreement to a third party for three years, the people said.The accord should allow the Justice Department to sign off on T-Mobile’s merger with Sprint as soon as Thursday. T-Mobile also is expected to reiterate that the economic terms of the Sprint deal, which it said would generate about $43 billion in savings, won’t be affected by the asset sale to Dish, the people said.Representatives for Dish, T-Mobile, Sprint and the Justice Department declined to comment.Shares of SoftBank Group Corp., the Japanese owner of Sprint, rose as much as 3.2% after Bloomberg reported on the Dish deal. T-Mobile is backed by Deutsche Telekom AG.T-Mobile and Sprint -- and their overseas parent companies -- have spent more than a year fighting to get their merger approved. Federal Communications Commission Chairman Ajit Pai recommended in May that his agency clear the deal, but the Justice Department has been harder to win over.As part of the Dish agreement, the satellite-TV company gets a seven-year wholesale agreement allowing it to sell T-Mobile wireless service under the Dish brand. The package also includes a three-year service agreement from T-Mobile to provide operational support as prepaid customers shift to Dish.Fourth CarrierThe Justice Department’s antitrust chief, Makan Delrahim, has pushed for an agreement that would be a win for consumers and compensate for the fact that T-Mobile’s merger with Sprint would reduce the number of major players in the wireless industry to three from four.Dish’s role would satisfy the government’s longstanding demand that there be four national mobile-service companies remaining, even after the merger of the third- and fourth-ranked carriers in the market.Critics have noted that the track record for competitors created by divestitures has been dismal. French communications firm Iliad SA became Italy’s fourth carrier last year after buying assets divested by two larger rivals that merged. Iliad had an initial surge in subscriber growth, followed by a slowdown.Even if T-Mobile and Sprint secure the Justice Department’s blessing, they face resistance from a group of state attorneys general. They say the deal should be blocked because it will hinder competition and raise prices.(Updates with attorneys general in final paragraph.)To contact the reporters on this story: Nabila Ahmed in New York at nahmed54@bloomberg.net;David McLaughlin in Washington at dmclaughlin9@bloomberg.net;Scott Moritz in New York at smoritz6@bloomberg.netTo contact the editors responsible for this story: Liana Baker at lbaker75@bloomberg.net, Nick TurnerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
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