Bloomberg reported – though no one has yet officially confirmed – that Dish Networks will pay $1.5 billion for Sprint’s pay-as-you-go service, Boost Mobile, and another $3.5 billion for spectrum, to allow it to turn Boost into a facilities based network.
This is less than expected: reports over the past few weeks have said Dish was willing to pay up to $6 billion, though originally Sprint was expecting only $3 billion. Dish has been building up its own spectrum for around a decade.
The new Dish/Boost merger will become a fourth nationwide network in the US, fulfilling a condition set by the US Department of Justice (DoJ), which was unhappy that four national networks – AT&T, Verizon, T-Mobile and Sprint – would be collapsed to three.
The combined T-Mobile US/Sprint business – which will use solely the T-Mobile brand – will provider stronger competition to the big two, AT&T and Verizon.
John Legere (pictured), CEO of T-Mobile US, will stay as CEO of the merged company, Sprint and T-Mobile said last year.
A question that hasn’t yet been answered is what will happen to Sprint’s wholesale business.
Sprint is majority controlled by SoftBank, while T-Mobile US is majority owned by Deutsche Telekom. SoftBank has agreed that Deutsche Telekom will have effective control of the merged business.
The Federal Communications Commission (FCC) has already approved the merger, but the final decision will be with Makan Delrahim, antitrust head at the DoJ. William Barr, the US attorney general, heads the DoJ but recused himself from the decision because he was on Time Warner’s board before it was bought by AT&T for $60 billion, and still has vested options and dividends in AT&T, understood to be valued at between $750,000 and $1.5 million.
Two days ago Delrahim began an investigation into major web providers, believed to be Google, Apple, Facebook and Amazon.
Deutsche Telekom said last year there would be about $43 billion in cost synergies in creating the new company. The new T-Mobile US will have standalone funding, and will pay back $8 billion worth of debt to the German parent.
If Deutsche Telekom CEO Tim Höttges goes ahead with his long-rumoured plan to bid for BT, that $8 billion will help: the UK company’s market cap is now around £18.7 billion ($23.4 billion). Deutsche Telekom is BT’s biggest shareholder with 12%.
