T-Mobile and Sprint May Offload $6 Billion in Assets to Dish As Part of Merger Deal With DOJ

We may earn a commission from links on this page.
Dish Network satellite dishes in Palo Alto, California, 2011.
Dish Network satellite dishes in Palo Alto, California, 2011.
Photo: Paul Sakuma (AP)

Dish Network Corp. is “in talks” to buy up assets that T-Mobile and Sprint are planning to sell off in order to have their terrible merger approved by antitrust authorities, Bloomberg reported on Tuesday.

Sources familiar with the discussions told Bloomberg that Dish may announce a deal to buy up “assets including wireless spectrum and Sprint’s Boost Mobile brand” as soon as sometime this week. That deal is part of a package to convince the Department of Justice that there would be “at least four viable wireless players” if it approves T-Mobile’s $26.5 billion bid to acquire Sprint, which would create a behemoth that would rival industry giants Verizon and AT&T.

Last month, Federal Communications Commission chief Ajit Pai said he would recommend approving the T-Mobile/Sprint merger based on vague promises it would speed up 5G deployment. But soon after, news emerged that DOJ staff had long been “skeptical” of the merger and that the agency’s antitrust division was pushing for a lawsuit to stop it—based on the almost certainly correct belief that downgrading from four to three major national carriers would damage competition and raise prices to the detriment of consumers. Just last week, reports also emerged that attorneys general in at least 10 states are planning on filing a separate lawsuit to block the deal.


That could leave T-Mobile and Sprint with only a narrow pathway to pulling off the deal. In addition to requiring the merged company to agree to sell off Boost Mobile, commit to 5G infrastructure buildout in rural areas, and not raise prices for three years, the DOJ’s terms of approval reportedly may include that it spins off enough assets to create a viable fourth national contender. According to Bloomberg, one of the DOJ’s preferred candidates is Dish.

As Bloomberg’s Tara Lachapelle separately noted, though, those terms might end up biting T-Mobile and Sprint in the behind down the road. Lachapelle wrote on Tuesday that Dish doesn’t have a wireless network and “taking on Boost’s prepaid customers also wouldn’t seem to give Dish much of a leg up in the wireless space,” but the company is already known as a “hoarder” of mid-band spectrum licenses. Lachapelle argued that if the merged company does end up unloading $6 billion in assets to Dish, that could give it everything it needs to partner with a potentially dangerous upstart like Amazon:

What Dish does need is a partner with the ability to help build its network. If the Sprint deal were to collapse, T-Mobile could be said partner. (After all, Dish has been one of the biggest opponents of the T-Mobile-Sprint merger, at least until now it seems.) Or what about Amazon?

A couple of years ago, Ergen reportedly discussed a partnership of sorts with Amazon.com Inc. – and that has to make T-Mobile a little nervous. It’s hard to see how buying Sprint and potentially providing an entry point for Amazon is a better outcome for T-Mobile than the status quo of competing with Sprint, a far weaker rival.


Yikes! (Comcast was also rumored to be in the running for such a partnership, but denied it had plans to buy the assets last month.)

No deal is certain and talks could fall through, according to Bloomberg. While Sprint is reportedly desperate to seal the deal, T-Mobile may be more anxious about moving forward under these conditions. As Lachapelle noted, creating such a dilemma for T-Mobile may in fact have been the DOJ’s intent when it began floating the divestiture requirements.