The U.S. Department of Justice on Friday approved T-Mobile’s proposed $26.5 billion acquisition of Overland Park, Kansas-based Sprint, marking a major step toward the combination of the No. 3 and No. 4 U.S. wireless carriers.
Under the proposed deal, the companies will be required to divest certain Sprint assets to assuage DOJ concerns about competition in the wireless market. They will sell Sprint’s prepaid business, including Boost Mobile, Virgin Mobile and Sprint prepaid, to Dish Network, the Englewood, Colorado-based satellite-TV provider.
Dish also will get access to at least 20,000 cell sites and hundreds of retail locations, and it will have access to T-Mobile’s network for a period of seven years while Dish builds out its own 5G network, according to a press release from the DOJ.
Dish will pay T-Mobile approximately $5 billion for the assets it is acquiring: $1.4 billion for the prepaid businesses and $3.6 billion for the spectrum, according to a press release from Dish.
Executives for T-Mobile and Sprint portrayed the deal as a positive step for the development of 5G technology.
“Today’s clearance from the DOJ, along with our anticipated approval from the FCC, will allow the U.S. to fiercely compete for 5G leadership,” Sprint Executive Chairman Marcelo Claure said in a news release.
Though T-mobile, which has its headquarters in Bellevue, Washington, has announced that it will have a “second headquarters” on Sprint’s campus in Overland Park, Kansas, the prospect of the companies combining has raised concerns about the Kansas City area losing jobs, philanthropic contributions and more that come with having a corporate headquarters.
Sprint has been a linchpin in Kansas City’s business community said Ryan Weber, president of the KC Tech Council. Weber hopes that the new T-mobile will step into Sprint’s shoes with its contributions to the community.
“Sprint was historically a pillar of the corporate community, and invested in everything from the arts to business organizations,” Weber said. “All of us are hoping that it continues.”
Updates: This is a developing story and has been updated as new details have become available.