After years of speculation and months of negotiations, DISH Network is entering the wireless industry beginning this July. While the world awaits the terms DISH and T-Mobile have reached, an SEC filing has shown that the deal for DISH’s purchase of Boost Mobile is complete and will be final July 1st. The terms of the agreement will be of some concern to consumers and investors alike as one of the major components includes allowing Boost Mobile customers and the phones they can own that can connect to T-Mobile’s network also.
The opportunity for DISH to purchase Boost Mobile presented itself when the merger between T-Mobile and Sprint was originally shut down by the government. To protect consumers from a monopolized industry, the government would eventually allow T-Mobile and Sprint to complete their merger but only with the contingency that a fourth major wireless provider becomes available for consumers. The terms were drawn up and Sprint agreed to sell its pay-as-you-go brand Boost Mobile to DISH after merging to create a fourth competitor and appease government regulations. Makan Delrahim, the leader of the antitrust division at the Department of Justice, oversaw the deal for DISH to purchase Boost Mobile with the price believed to be $1.4 billion. DISH is still building its extensive 5G network, but meanwhile, DISH and T-Mobile are working to grant customers access to T-Mobile’s network for seven years. The CFO of T-Mobile, Braxton Carter, represented the companies by signing the deal to make it official and to announce his retirement will coincide with the finalization of the deal. Peter Osvaldik will be filling the role from his current position of chief accounting officer for T-Mobile come July 1st.
DISH has also purchased 800 Mhz spectrum from T-Mobile, as reported by CNET. The reported cost is to be $3.6 billion and will go into DISH’s already notable collection. The satellite television giant has been under the radar of various wireless companies as it has purchased spectrum throughout the years without ever using it. Now that DISH has stated its intentions of developing a major 5G network, the purchase of Boost Mobile will help it achieve these goals in a major way.
The full implementation of DISH’s 5G network is years away but another term from the government allowing these deals to occur is that DISH will have to cover 70% of the United States by 2023. DISH continues to take a city-by-city approach to cover markets with speculations surrounding the need for an extension due to disruptions that have occurred due to the COVID-19 pandemic. The company is also expected to work with a mystery partner with major names being floated around such as Amazon that will help roll out its 5G network. What the future holds will be interesting to see; however, a giant step forward is being taken by acquiring Boost Mobile and officially entering the wireless network sector.
Source: Bloomberg
