What you need to know
- T-Mobile and Sprint close to agreeing to divest Boost Mobile and some spectrum.
- Dish Network, Charter and Altice rumored to buy the assets to create new fourth carrier.
- Deal between DOJ, carriers and asset buyer could be made as early as next week.
T-Mobile and Sprint are edging ever-closer to merger approval by working with the Department of Justice to divest assets that would create a new fourth wireless carrier. Building on information from a previous report, the New York Times says the carriers are in discussions with Dish Network, Charter and Altice to acquire Boost Mobile (currently a Sprint MVNO) and some of Sprint's valuable wireless spectrum.
This may make the DOJ happy, but would it actually accomplish anything?
The critical part of this deal structure is that Sprint would actually be giving up spectrum holdings, not simply the Boost Mobile brand that runs on Sprint's existing network. In order for any new carrier to be a true competitor on any scale, it would need its own spectrum holdings. If the merger were to be structured with this sort of deal in place, it would presumably ease pressure coming from a multi-state lawsuit that's aiming to block the merger on the basis that it would reduce competition.
The question, of course, is why we're going through all of these hurdles to simply end up with four U.S. carriers once again. The combined T-Mobile and Sprint would have a large enough customer base, and network infrastructure, to ostensibly compete with Verizon and AT&T. But this new Boost Mobile-based smaller carrier, now under control of another telecom company, would be so small and starting from a disandvantaged position such that it would end up becoming what Sprint is today — a distant fourth player not actually challenging the bigger three.