As expected, the Department of Justice made an announcement today approving a merger between Sprint and T-Mobile. While the merger isn’t officially closed, DOJ approval was the largest hurdle T-Mobile and Sprint needed to jump before making their merger a reality.
As far as I can tell, the terms of the merger were consistent with what most commentators were expecting:
- Most of Sprint’s prepaid business will be divested to DISH1
- DISH will get Sprint’s 800 MHz spectrum
- DISH will receive access to the New T-Mobile’s network for at least 7 years2
- DISH will have the option to take over leases on some retail stores and cell sites
I don’t think mergers between telecom companies have a good track record of benefiting consumers. I hope this merger will be different, but I’m not betting on it. As many others have pointed out, something is odd about the whole arrangement. The divestitures to DISH are ostensibly intended to allow DISH to create a viable, facilities-based carrier (i.e., a carrier that has its own hardware and doesn’t just piggyback off other companies’ networks). If DISH is likely to succeed, it’s hard to explain why Sprint couldn’t remain a viable force. Maybe I’m misunderstanding something important.
I expect the merger-related transitions to take a few years, and I plan to write about new developments as they occur. Should be interesting.
For those interested, here are a few excerpts from T-Mobile’s announcement: