What you need to know
- The Department of Justice could finally approve T-Mobile's merger with Sprint this week, possibly on Wednesday.
- Dish Network will be the new wireless competitor as part of the deal.
- T-Mobile and Sprint still have a few hurdles to clear before they can merge.
The Department of Justice could soon approve the merger between T-Mobile and Sprint. As per a report from CNBC, the approval might be announced as soon as Wednesday. As part of an agreement between the two carriers and the Department of Justice, Dish Network will be the new fourth wireless competitor in the U.S.
Dish Network has been aspiring to become a wireless provider for quite a long time now, having spent billions of dollars on purchasing wireless spectrum. T-Mobile and Sprint initiated talks with Dish Network last month after the Department of Justice asked the two carriers to offload some of their assets to create a new wireless competitor.
Given how the DOJ is strongly pushing for a strong fourth wireless competitor, it is being suggested that limitations on Dish are likely to be minimal. Dish Network will be free to sell an equity stake in its wireless business to whomever it wishes, which means it could partner with a big-balance-sheet company to emerge as a formidable rival to other U.S. carriers. As its network-sharing agreement with T-Mobile will only last around seven years, the company will require enormous capital to build its own 5G wireless network.
Analysts also believe that Dish may offer more affordable services than AT&T, Verizon, and T-Mobile in order to add as many new customers as it can initially. T-Mobile is reportedly worried as a reason as it believes it may be creating "an intelligent, highly motivated competitor." Deutsche Telekom, T-Mobile's parent company, however, is convinced that a merger with Sprint is better than the alternative.
Even if the DOJ approval does arrive on Wednesday, T-Mobile and Sprint will still need to worry about the lawsuit from 13 state attorneys general that aims to block the $26.5 billion merger deal.