Dish has reportedly struck a deal with T-Mobile, to divest some of its spectrum and Boost Mobile to the satellite provider Dish, in order for the Justice Department to approve of its merger with Sprint.
The Justice Department needs to sign off on this deal, before it can be approved and before the merger with Sprint can be approved. This report comes out of CNBC, who has a pretty good track record with telecommunications reports.
The Justice Department still needs to decide on whether Dish would represent meaningful competition to T-Mobile, Verizon, and AT&T following the $26 billion merger between T-Mobile and Sprint.
Dish already has spectrum from different spectrum auctions over the past decade. If there is a company that could become a meaningful competitor to the existing wireless carriers, Dish would be the one in mind. T-Mobile and Sprint have already agreed to sell Boost Mobile to get this deal done, and the DOJ also wants it to sell some of its own spectrum.
T-Mobile wants to limit Dish's spectrum capacity to around 12.5 percent. Meanwhile, Deutsche Telekom wants to limit any strategic Dish investor to 5 percent.
This to make sure that T-Mobile and Deutsche Telekom aren't spending $26 billion to be left in the same spot they are in now. In distant third place behind the top two US carriers. The whole reason for the two to merge was to be able to better compete with top carriers, both of which are nearly three times the size of T-Mobile now. The combined T-Mobile and Sprint, would still be smaller than the top US carriers.
The Justice Department has a few things that it wants done before it can approve this merger between T-Mobile and Sprint. One major caveat is to make a fourth, viable, wireless carrier. Which would be the point of selling spectrum to Dish as well as selling Boost Mobile.
Dish being the perfect buyer, giving it has spectrum that it needs to start deploying, before the FCC starts fining Dish and has been wanting to get into the wireless industry for many years.