T-Mobile US Inc
T-Mobile sells Boost for $1.4 billion
03 July 2020 | Melanie Mingas
T-Mobile US Inc. (NASDAQ: TMUS) has divested its interests in Sprint’s prepaid wireless business Boost Mobile, to DISH Network Corporation (NASDAQ: DISH) for US$1.4 billion.
The deal fulfils the commitment that T-Mobile and Sprint made to the Department of Justice and to the Federal Communications Commission as part of their merger process and is intended to ensure price-sensitive customers in densely populated areas would not be harmed by the merger.
In closing the DISH transaction, T-Mobile, Sprint and DISH will also enter into certain other ancillary agreements, including a spectrum purchase agreement.
“We just checked an important milestone. In closing our deal with DISH to divest Sprint’s prepaid brand, T-Mobile followed through on fulfilling one of the most significant commitments we made as part of this merger process. We are excited to keep making big steps forward and, as promised, continue to work toward delivering the transformative nationwide 5G network that is only possible with the New T-Mobile’s combined capacity AND breadth to consumers across the U.S,” said T-Mobile CEO Mike Sievert.
By leveraging T-Mobile’s network and spectrum resources through a network access agreement, DISH said it will be able to offer “competitive service options” while it builds out its own 5G network.
DISH has made a commitment to use its acquisition of Boost and 5G infrastructure investments, to deploy “a competitive 5G wireless service using its long-held spectrum licenses”. Its buildout plan includes a first-of-its-kind greenfield standalone 5G network using open RAN equipment and virtualised, cloud-native 5G-RAN software.
Welcoming the development, Ajit Pai, chairman of the US Federal Communications Commission (FCC) said it was a “key step towards promoting vigorous competition in the wireless marketplace, particularly for price-conscious consumers in our nation’s cities”.
“I’m pleased to see that T-Mobile has met one of its most important merger commitments,” Pai said.
He added: “I also welcome DISH’s entry into the mobile industry. With this divestiture and its existing spectrum resources, DISH has the potential to make a big impact on a wireless marketplace that is transitioning to 5G, the next generation of wireless connectivity. Of course, while this divestiture is good news, the Commission remains committed to ensuring that T-Mobile and DISH comply in the coming months and years with all of the conditions imposed by the FCC in this proceeding.”
At a customer level, divested prepaid customers and new DISH wireless customers will have full access to the new T-Mobile network in a phased approach through a mobile virtual network operator (MVNO) arrangement, as well as through an infrastructure mobile network operator (MNO) arrangement, enabling roaming in certain areas until DISH’s 5G network is built out.
As reported by Capacity in April, the merged T-Mobile and Sprint will do business as T-Mobile US, and the Sprint name will vanish from the industry. However, in late June T-Mobile stakeholder SoftBank Group sold around two thirds of its interest in the firm to raise $14.8 billion from institutional investors at a 3.9% discount to the market.
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