Sprint, T-Mobile Merger Back On Hold
A big part of the merger holdup is the requirement of the DOJ for a 4th viable wireless carrier to exist. For this reason, my prediction has long held that the merger will get blocked. Dish doesn't appear ready to step-up to the plate without major handouts and T-Mobile doesn't want the merger, if the end result is to create a strong 4th competitor.
The prediction still remains that the merger gets blocked and Sprint dips to $3.
More research on the subject:
Seeking Alpha - Sprint: No Merger Approval Guaranteed
WhoTrades - June 11 blog post
Updated - July 12
Altice USA entering the bidding competition for new T-Mobile assets does increase the likelihood of a deal getting done. Altice has been more aggressive at actually creating a mobile service while DISH appears only interested in a gift (deal) that T-Mobile won't accept.
Altice USA (ATUS ) is the latest company to come in for a meeting with the FCC's transaction team handling the proposed $26.5B merger of Sprint (S ) and T-Mobile (TMUS ).
Updated - July 26
The DOJ has tentatively agreed to the merger based on Dish Networks (DISH) buying prepaid assets and spectrum from the new T-Mobile (TMUS). For now, 13 state AGs are still pursuing a lawsuit that would block the merger.
The biggest question is whether a Dish Networks with 9.3 million prepaid subs from Sprint that cost only $1.8 billion is a worthwhile competitor. Dish has the spectrum, but not much else to become a viable 4th competitor. The fact that T-Mobile agreed to this deal is very telling.
Questions still exist on whether this merger gets approval. Both AT&T (T) and Verizon Communications (VZ) are up suggesting where the market sees the advantages that a merger under these divestitures. Dish is only committing to cover 70% of the population with 5G by 2023.
- Dish notes it's committed to the FCC that it will deploy a facilities-based 5G broadband network capable of serving 70% of the U.S. population by June 2023, and it's requested (and will receive) license modifications to reflect that timeline.
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