The US Department of Justice (DoJ) warned it will sue to block a proposed merger between Sprint and T-Mobile US if the pair don’t finalise a deal to divest assets by the end of next week, CNBC reported.
Sources told the news outlet T-Mobile parent Deutsche Telekom is hesitant to sign a divestiture deal with Dish Network because it is worried the satellite company may later be purchased by a cable company looking to compete in the mobile market.
A deal with Dish Network would reportedly include the transfer of spectrum and Sprint prepay brand Boost Mobile, along with an MVNO agreement allowing Dish Network to use T-Mobile capacity while it builds up its new network.
Deutsche Telekom apparently wants to include a condition which would terminate the MVNO agreement if Dish Network is subsequently acquired by a cable operator. However, the DoJ refused to agree to such a clause.
Wells Fargo Securities senior analyst Jennifer Fritzsche wrote in a research note such a move would offer cable operators “a very clear path to own spectrum” and “may not be overly surprising after all”:
“We have long thought that Comcast and Charter Communications could move away from the MVNO it has in place with Verizon. While Verizon’s fixed wireless push for 5G is still very nascent, if it does have success, one has to wonder why cable would continue to partner with a carrier which is actively trying to ‘uncable’ the cable providers’ broadband pipe.”
If the DoJ moves against the deal, it would follow in the footsteps of thirteen states and the District of Columbia, which jointly filed a lawsuit in June to stop the merger.
Trial in that case is tentatively scheduled for October. However, Bloomberg reported earlier this week an attorney for the states requested oral arguments be delayed, claiming they cannot prepare their case without knowing the details of the potential DoJ settlement.Subscribe to our daily newsletter Back