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Business deals

US poised to approve merger of T-Mobile, Sprint

Wireless companies to divest customers, assets to Dish to address antitrust concerns

The union of T-Mobile and Sprint would create a third major U.S. wireless company with more than 80 million customers.   © Reuters

The Justice Department is poised to approve T-Mobile US Inc.'s merger with Sprint Corp. under a divestiture plan that would equip satellite-TV operator Dish Network Corp. with the building blocks for a new wireless network, according to people familiar with the matter.

The companies have spent weeks negotiating with antitrust enforcers and each other over the sale of assets to Dish to satisfy concerns that the more than $26 billion merger of the No. 3 and No. 4 wireless carriers by subscribers would hurt competition, the people said.

The department could announce a settlement with the companies as soon as this week, but the timing remains uncertain, some of the people said. The merger still faces a legal challenge from several state attorneys general.

The arrangement provides for Dish to acquire prepaid subscribers and wireless-spectrum licenses from the merger partners, the people said. Dish would also get a multiyear agreement to use the wireless companies' network while it builds dedicated infrastructure, the people said.

T-Mobile has scheduled its quarterly earnings release for Thursday evening.

The union of T-Mobile and Sprint, years in the making, would create a third major U.S. wireless company with more than 80 million customers, closing the gap with industry leaders Verizon Communications Inc. and AT&T Inc.

U.S. carriers have been battling for customers in the $180 billion market for voice and data revenue, where growth has slowed now that the companies have rolled out unlimited data plans and most Americans have upgraded to smartphones.

The deal brokered with Dish is intended to maintain competition by creating a fourth national player, though the satellite-TV provider would be dwarfed by the others in terms of both subscribers and revenue. Dish had $13.6 billion in revenue last year and has about $13 billion in net debt.

Dish has amassed vast amounts of wireless spectrum over the years that it needs to put to use or risk losing its licenses. Justice Department officials are focused on giving the company the remaining pieces needed to build a fourth nationwide mobile network.

(Dow Jones)

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