DOJ officially signs off on T-Mobile/Sprint merger

The U.S. Department of Justice officially blessed the $26.5 billion merger of Sprint and T-Mobile, approving a deal that sets Dish Network up as a fourth facilities-based national competitor in a long-awaited announcement on Friday.

Five state attorneys general, representing Nebraska, Kansas, Ohio, Oklahoma, and South Dakota, also signed off on the settlement.  

Under the newly approved deal, T-Mobile and Sprint must sell Sprint’s prepaid business including Boost Mobile, Virgin Mobile, and the Sprint-branded prepaid service, which serve about 9.3 million customers in total, to Dish for $1.4 billion. Dish is also picking up 14 MHz of Sprint’s 800 MHz spectrum for about $3.6 billion.  

Sprint and T-Mobile must make 20,000 cell sites and “hundreds” of retail locations available to Dish.

The DOJ is also requiring that Dish have “robust access” to T-Mobile’s network for seven years as the satellite operator builds out its own 5G network.

RELATED: Dish is in ‘win-win’ situation, deal or no deal: analyst

T-Mobile said legacy prepaid customers and new Dish wireless customers will have full access to the legacy Sprint network and the New T-Mobile network in a phased approach. Access to the merged company’s network will be via an MVNO agreement, as well as an Infrastructure MNO arrangement, enabling roaming in certain areas until Dish’s 5G network is built.

Dish separately announced it made a commitment to the Federal Communications Commission to deploy a facilities-based 5G network capable of serving 70% of the population by June 2023.

“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 Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division in announcing the deal.  “Today’s settlement will provide Dish with the assets and transitional services required to become a facilities-based mobile network operator that can provide a full range of mobile wireless services nationwide.”

Delrahim added, “In crafting this remedy, we are also mindful of the significant commitments T-Mobile, Sprint, and Dish have made to the Federal Communications Commission.”

T-Mobile and Sprint previously made commitments to the FCC to divest Boost Mobile, not raise prices for three years, and to build out 5G and in-home broadband in rural areas of the country. FCC Chairman Ajit Pai already signaled his approval of the deal, though there has not been a formal commission decision yet.

A decision expected yesterday was reportedly delayed as the Justice Department tried to get state attorneys general on board. The deal still faces a lawsuit filed previously by a group of state attorneys general, including those representing New York and California, which must be resolved before the merger can be completed

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“Today marks an incredibly important step forward for the New T-Mobile,” said T-Mobile CEO and new T-Mobile CEO John Legere in a statement. "Our goal was to ensure that the DOJ's concerns were addressed while enabling us to deliver on every aspect of the synergies we promised to unlock … and we did it. It may have taken longer than expected by some, but today's results are a win-win for everyone involved.”

T-Mobile is holding its second-quarter earnings call this afternoon.