Friday, June 14, 2019

T-Mobile And Sprint To Sell Off Boost Mobile

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T-Mobile and Sprint are closer to merger approval, working with the Department of Justice to divest assets that would create a new fourth wireless carrier. The New York Times says the carriers are in discussions with Dish Network, Charter, and Altice to acquire Boost Mobile and some of Sprint's wireless spectrum.

The critical part of the structuring deal is that Sprint would be giving up spectrum holdings, not just the Boost Mobile brand that runs on Sprint's existing network. In order for a new carrier to be a true competitor it would need its own spectrum holdings. If the merger were to be structured with this sort of deal in place it would presumably ease pressure coming from lawsuits that's aiming to block the merger on the basis that it would reduce competition.

The question is why are we going through all of these hurdles to end up with four U.S. carriers once all is said and done. The combined T-Mobile and Sprint would have a large enough customer base and network infrastructure to compete with other major U.S. carriers. But the new smaller carrier would be starting from a disadvantaged position.

Source: The New York Times

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