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Big sale ahead: U.S. approves Sprint, T-Mobile merger with substantial divestiture

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Christian Fernsby ▼ | July 26, 2019
The Department of Justice announced that it and the Attorneys General for five states reached a settlement with T-Mobile and Sprint regarding their proposed merger.
Sprint
Acquisition   The settlement requires a substantial divestiture package
The settlement requires a substantial divestiture package in order to enable a viable facilities-based competitor to enter the market.

Further, the settlement will facilitate the expeditious deployment of multiple high-quality 5G networks for the benefit of American consumers and entrepreneurs.

The Department’s Antitrust Division, along with the offices of five state Attorneys General (Plaintiff States), filed a civil antitrust lawsuit in the U.S.

District Court for the District of Columbia to block the proposed transaction.

At the same time, the Department and the Plaintiff States filed a proposed settlement that, if approved by the court, would resolve the Department’s and the Plaintiff States’ competitive concerns.

The participating state Attorneys General offices represent Nebraska, Kansas, Ohio, Oklahoma, and South Dakota.

Under the terms of the proposed settlement, T-Mobile and Sprint must divest Sprint’s prepaid business, including Boost Mobile, Virgin Mobile, and Sprint prepaid, to Dish Network Corp., a Colorado-based satellite television provider.

The proposed settlement also provides for the divestiture of certain spectrum assets to Dish.

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

T-Mobile must also provide Dish with robust access to the T-Mobile network for a period of seven years while Dish builds out its own 5G network.

The Department and the Plaintiff States said that, without the divestiture, the proposed acquisition would eliminate competition between two of only four facilities-based suppliers of nationwide mobile wireless services.

According to the complaint, T-Mobile and Sprint both operate mobile networks and offer nationwide coverage to consumers, and they are particularly close competitors to each other for the roughly 30% of retail subscribers who purchase prepaid mobile wireless service.

The combination of T-Mobile and Sprint would eliminate head-to-head competition between the companies and threaten the benefits that customers have realized from that competition in the form of lower prices and better service.

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