Deutsche Telekom ‘doubts’ about terms for $26bn Sprint/T-Mobile deal
19 July 2019 | Alan Burkitt-Gray
Next week will be final decision time for the $26 billion project to merge Sprint with T-Mobile US, with Deutsche Telekom reportedly on the verge of pulling out.
Deutsche Telekom, which is the majority shareholder in T-Mobile US, is understood to be doubtful about creating a new fourth US operator from Boost Mobile, currently a Sprint-owned mobile virtual network operator (MVNO) running on Sprint infrastructure.
Satellite TV broadcaster Dish Network is ready to pay $6 billion to take Boost off Sprint’s hands, along with spectrum to allow it to compete with AT&T, Verizon and the merged operator, which will continue to use the T-Mobile brand.
The MVNO deal would last three years, while Dish builds its own wireless network: it already has its own spectrum and reports say Sprint would include more spectrum with the sale of Boost. But that would turn Dish into an attractive target for another media and telecoms player.
Unconfirmed Wall Street reports say Deutsche Telekom wants to prevent a cable company – such as Comcast or Charter – or another ambitious company such as Amazon or Google from acquiring Dish and Boost in the future, to create a powerful content, satellite, cable and mobile competitor.
The current deadline for a deal to be concluded is 29 July – a week on Monday. The Federal Communications Commission (FCC) has already approved the merger, but the US Department of Justice (DoJ) is wanting Sprint to sell off Boost as a condition for granting its approval. A number of US states are separately opposing the deal.
Under the terms of the merger agreement Deutsche Telekom will control the merged operation, with SoftBank, the majority shareholder in Sprint, ready to cede control to the German company.
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