T-Mobile's $26 Billion Blockbuster Merger With Sprint Wins Justice Department Approval

sprint tmobile
Hot on the heels of news earlier this week that the U.S. Department of Justice was on the verge of approving the merger of T-Mobile and Sprint, the news was confirmed this morning. The merger is valued at $26 billion, and will create a strengthened third-place wireless carrier to better compete with #1 Verizon and #2 AT&T.

However, there are number of concessions that had to be made for the merger to obtain the DOJ's blessing. For starters, Sprint is divesting its prepaid business including Boost Mobile and Virgin Mobile to Dish Network, which is creating its own wireless service. Dish Network will also gain 800MHz spectrum totaling $5 billion from T-Mobile and Sprint along with 20,000 cell sites and hundreds of retail locations.

In addition, Dish Network will have "robust access" to T-Mobile's 4G LTE and 5G networks for no less than seven years as it works to construct its own infrastructure. In other words, Dish Network is going to have a pretty good head start on becoming the nation's new fourth place-wireless carrier thanks to the T-Mobile-Sprint merger. That was one of the major sticking points to gain DOJ approval of the deal, as the government was fearful that the transaction would result in less competition in the marketplace and higher prices for consumers.

tmobile john legere
T-Mobile CEO John Legere

“With this merger and accompanying divestiture, we are expanding output significantly by ensuring that large amounts of currently unused or underused spectrum are made available to American consumers in the form of high quality 5G networks,” said Justice Department Antitrust Division Assistant Attorney General Makan Delrahim. “In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint, and Dish have made to the Federal Communications Commission.”

It not exactly all clear blue skies ahead for T-Mobile and Sprint, however. Five states have piled on in an effort to block the merger on antitrust grounds. However, there is a proposed settlement to table with the five states -- Nebraska, Kansas, Ohio, Oklahoma, and South Dakota -- what could rectify the issues raised and put the matter to rest.

"The T-Mobile and Sprint merger we announced last April will create a bigger and bolder competitor than ever before – one that will deliver the most transformative 5G network in the country, lower prices, better quality, unmatched value and thousands of jobs, while unlocking an unprecedented $43B net present value in synergies," said John Legere, who serves as the CEO of T-Mobile and will also serve as CEO of the New T-Mobile.

"We plan to build one of the world’s most advanced 5G networks, which will massively revolutionize the way consumers and businesses use their connected devices to enhance their daily lives," added Sprint Executive Chairman Marcelo Claure. "The powerful combination of 5G, artificial intelligence and the Internet of Things will unleash endless possibilities.”

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