On Tuesday, Dish Network (DISH) Chair Charlie Ergen testified about competing with top US wireless service providers “from day one” after the pay-TV provider acquires wireless assets from T-Mobile (TMUS) and Sprint (S).
The proposed $26 billion merger deal between T-Mobile and Sprint has received conditional approval by the Federal Communications Commission and the US Department of Justice. Federal regulators approved the deal after the combined company agreed to sell part of its wireless properties to Dish.
Dish will purchase Sprint’s prepaid businesses and a portion of its wireless spectrum for a total of $5 billion after the merger deal is complete.
Dish chair testifies in T-Mobile–Sprint merger deal
According to a Bloomberg report on December 17, “Ergen is a key witness in T-Mobile and Sprint’s defense of the $26.5 billion deal. They say Dish’s plan to set up a brand new competitor should negate any concern that their tie-up will reduce competition.”
Ergen said, “We will compete with the largest operators in the United States, and we’ll compete from day one … telling the court at one point that three banks are ready to lend $10 billion to Dish to build its new network,” reported Bloomberg. He added, “Dish plans to offer prepaid as well as postpaid plans to wireless customers.”
The T-Mobile–Sprint merger currently faces litigation filed by about 14 Democratic state attorneys general on antitrust grounds. The state attorneys general are trying to stop the merger. They believe the combination would lead to higher wireless prices by reducing competition in the wireless industry.
The states argue that Dish hasn’t yet showcased its ability to build a wireless 5G network. Dish also can’t replace Sprint, as it would start with 9 million wireless customers. Sprint currently has about 50 million wireless customers.
T-Mobile stock closed 0.03% higher on December 17, ending the trading day at $75.49. The stock was trading 11.4% below its 52-week high of $85.22 and 25.9% above its 52-week low of $59.96. At its closing price, T-Mobile’s market cap stood at $64.6 billion. T-Mobile stock has risen about 18.7% YTD (year-to-date).
In comparison, Sprint and Dish have returned -10.7% and 38.6%, respectively, YTD.
Read Sprint Ex-CEO Testifies in T-Mobile Merger Antitrust Trial to learn more.