Home » Competition »Consumer News »Dish Network »Public Policy & Gov't »Sprint »T-Mobile »Video »Wireless Broadband » Currently Reading:

Dish Nears Deal to Acquire Boost Mobile, Clearing Path for T-Mobile/Sprint Merger

Dish Network Corporation is in the final stages of talks to acquire assets that include valuable wireless spectrum and Sprint’s Boost Mobile brand for an estimated $6 billion, according to a report quoting anonymous sources published by Bloomberg News, clearing the way for the Department of Justice to approve the merger of T-Mobile and Sprint.

Dish could announce a deal as soon as this week, but sources caution the talks are still ongoing and a deal might still fall apart. A spinoff of Boost is reportedly essential for the Antitrust Division at the DoJ to approve the merger, because the regulator reportedly wants to preserve four national wireless carriers to protect wireless competition in the United States.

Dish has already warehoused extensive wireless spectrum, much of it potentially valuable for the future deployment of 5G wireless networks, but Dish has historically held its spectrum without launching any significant wireless operations. If Dish does acquire Boost, the deal will come with a pre-existing contract allowing the prepaid Mobile Virtual Network Operator (MVNO) to continue to use Sprint’s network to service its customers. Dish would also receive a portion of spectrum held by T-Mobile and/or Sprint with which it could build its own wireless network, but that would require billions in new investments from a satellite TV provider already under financial stress from the impact of cord-cutting.

At worst, the transaction could allow Dish to increase its spectrum holdings while running Boost’s existing prepaid wireless operation as-is, dependent entirely on Sprint for connectivity. If the merger is successful, T-Mobile plans to mothball a significant portion of Sprint’s CDMA wireless network, which could eventually force Boost to find a new host for its wireless services.

Wall Street analyst MoffettNathanson remains skeptical about the T-Mobile/Sprint merger and is even more puzzled by Dish’s reported involvement. The analyst firm released a research note to its clients warning the future of Boost may be bleak:

We’re not sure why that deal is sensible for anyone involved. Dish, remember, already has more spectrum than they know what to do with; what they lack is money and ground facilities, and the deal described on Friday wouldn’t deliver either one. Instead, it would make both problems worse. And while Boost would help provide a baseline revenue stream in return for an upfront purchase price, the fit between Boost and Dish is, at best, superficial. Yes Boost serves a budget conscious consumer, as does Dish Network’s satellite business, but Boost is a mostly urban brand and Dish’s satellite business is an increasingly rural one.

And, more urgently, Boost’s distribution poses a huge problem. Historically, Boost was heavily dependent on Walmart for retail gross additions, but they’ve since lost that distribution channel. They would also, presumably, lose distribution through Sprint-branded stores (and even if, as a condition of the deal, they didn’t, does anyone think that Sprint/T-Mobile store employees would direct any volume to a spun off Boost brand?) That would leave Dish with the brand that has a churn rate as high as 5% per month to be spun off with an inadequate distribution front end, and with no realistic path to replace that front end before the subscriber base was, well, gone.

BTIG’s Walter Piecyk appeared on CNBC Monday to warn investors they are being too optimistic about the T-Mobile/Sprint merger’s chances of being approved. He puts those chances at “less than 50-50.” (5:38)

In contrast, Dade Hayes, contributing editor at Deadline, believes the deal will ultimately win approval from the Department of Justice. He talks to Cheddar about what T-Mobile and Sprint are doing to win over regulators. (8:14)

0 0 vote
Article Rating
Subscribe
Notify of
guest

This site uses Akismet to reduce spam. Learn how your comment data is processed.

0 Comments
Inline Feedbacks
View all comments

Search This Site:

Contributions:

Recent Comments:

  • Mez: Ive been looking high and low to file a comment on FCC site. Where do I file a comment on that mess of a site. Any help would be appreciated....
  • M Ross: LOL! This is no deal. In order to get streaming you have to get fast internet service and when that special Charter offer for a "...
  • M Ross: I have had Spectrum Select Cable TV with the DVR box for many, many years, so I called to order the additional internet Standard 200 Mbps and the spe...
  • Mike: Frontier keeps raising my monthly residential phone bill with unexplained fees. My bill for 1 land line, and 10mbs speed i...
  • ALF: Frontier had the worst customer service ever. DSL speeds remain mired at about 1 (yes, ONE) Mbps, down, much slower than that, up. I live a few miles ...
  • John Lodge: All Cord Cutters that view only Over the Air Broadcasts with ATSC 1.0 compliant sets and or tuners, they will be able to continue to receive their loc...
  • Robert Deed: 2 years later and Suddenlink is still using Docsis 3.0 :p...
  • Gloria Steiner: Hooray!...
  • Eric: I've had Frontier fiber internet since 2015 and haven't had any problems until Ziply took over. Since Ziply took over, my internet service has been g...
  • Eric: 2.7 and 4.3 are odd numbers.. 4.3 doesn't seem right in the first place....
  • Crazyfrankie56: I don't know about that because there was some speculation that Comcast sent money to Biden's campaign last year before the start of the Presidental p...
  • Crazyfrankie56: We all know that Ajit paihole is going to pull his BS tactics again to try to stop anti data cap comments from being public just like he did with Net ...

Your Account:

134
0
Would love your thoughts, please comment.x
()
x