Dish Network is jumping into wireless phone service after federal antitrust regulators on Friday announced their approval for mobile carriers Sprint and T-Mobile to merge.
As part of the approval, Douglas County-based Dish, best known for satellite TV service, will pick up Sprint’s prepaid business customers and some wireless spectrum in a deal valued at $5 billion.
“These opportunities will set the stage for our entry as the nation’s fourth facilities-based wireless competitor and accelerate our work to launch the country’s first standalone 5G broadband network,” Dish Chairman Charlie Ergan said in a statement.
Sprint had to divest its spectrum and prepaid service in order to win U.S. Department of Justice approval on Friday to merge with T-Mobile. The merger that was made public in April 2018, when T-Mobile CEO John Legere announced the agreement on Twitter. The deal is valued at $26 billion and T-Mobile will maintain its third-place rank behind Verizon and AT&T, according to The Wall Street Journal.
The approval by the Justice Department’s antitrust division means the merger could be finalized later this year. Combined, T-Mobile would have 90 million customers (it currently has 83 million). Sprint will hand over its 9.3 million prepaid customers to Dish.
The merger gives consumers one less option, and some opposed the deal. Presidential candidate Elizabeth Warren said on Twitter: “This merger will cost thousands of jobs, reduce wages, and further reduce competition in a sector that badly needs it. We need antitrust regulators with the courage to stand up to monopolies.”
Last month, Colorado’s Attorney General Phil Weiser joined a multi-state coalition to block the merger. “The break-up of the AT&T monopoly 35 years ago paved the way for the competition, innovation, and customer choice in the telecommunications market that we all enjoy today,” he said in a statement. “To protect Colorado consumers, and the benefits that come from competition, the court should block this merger.”
The AG’s office also shared data from the Colorado Public Utilities Commission that showed as of March 2019, T-Mobile and Sprint had roughly 1.5 million customers.
But for Dish, this could mean even more local jobs, said Frannie Matthews, president of the Colorado Technology Association.
“It’s great news that Dish is expanding,” Matthews said. “They’re picking up assets. That’s a big deal. They’re not going to be able to talk about it because of the Department of Justice, but this will create jobs in Colorado and it gives us a better seat at the table of 5G.”
The promised 5G is already being rolled out by Verizon in the Denver area. The faster speeds are possible if one has the right phone and service.
Dish has been working its way to this point. It began buying up wireless spectrum at government auctions around 2008. In 2015, it was also part of a group awarded wireless licenses at a $3.3 billion discount through the Federal Communications Commission small business program. But after the FCC discovered Dish was among the recipients, the agency took back the discount and Dish ended up paying the additional $3.3 billion.
The company now owns $21 billion worth of spectrum. But it hasn’t done much with it and faces a Federal Communications Commission March 2020 deadline to use it or lose it.
Last year, the company acquired internet of things parking startup ParkiFi in Denver, as part of its plan to build a narrowband network, which is a low-powered and slower data network for parking sensors, gas meters or other devices that need internet but not that much.
But by adding Sprint’s spectrum, Dish is eyeing a faster mobile data service that 5G mobile customers expect today. This also means the company is expanding beyond satellite TV service, which has seen a decline in subscribers for years.
Whether Dish actually turns the spectrum into something consumers can use remains to be seen, said Sascha Segan, lead mobile analyst with tech site PCMag.
“I’m very skeptical about this,” Segan said in an email. “While Dish has been sitting on wireless spectrum for years, it’s done everything it could to avoid building a network or offering consumer wireless service. This deal puts a network in Dish’s hands essentially for free. But given Dish’s consumer-unfriendly history with its own wireless spectrum, I find it hard to believe it’s going to be an aggressive or disruptive player.”
Three months after Sprint-T-Mobile merge, Dish will get 14 MHz of Sprint’s nationwide 800 MHz spectrum, plus prepaid services that include the 9.3 million customers of Boost Mobile, Virgin Mobile and other brands. Dish plans to switch Sprint’s prepaid customers to T-Mobile’s network, which it has access to for seven years after the merger closes. Dish will eventually move customers over to its own network once it is operating.
The deal also includes Sprint’s retail stores, which employ 400 people.
T-Mobile declined to say how many customers or employees it has in Colorado, but did share that at its Colorado Springs customer service facility, there are 834 employees. The company also has many members of its TVision team in Denver, from its 2018 acquisition of Layer3 TV for $325 million.