A federal judge’s surprising approval of T-Mobile’s $26 billion acquisition of Sprint on Tuesday may be thanks to Dish Network Chairman Charlie Ergen and his behind-the-scenes deal making.
Ergen, the mercurial billionaire who controls Dish, appears to have played a pivotal role in convincing US Judge Victor Marrero that the satellite TV giant can create a viable wireless carrier to replace Sprint with a little help from his friends, court documents show.
Ergen on Dec. 17 testified that he was in talks with a strategic partner to help build a network to compete with Verizon, AT&T and the newly beefed up T-Mobile, court records show. He declined to name names in open session, but gave details to the judge behind closed doors.
In his 173-page decision approving the deal, Judge Marrero on Tuesday cited “evidence of the currently confidential and creative strategic partnerships that Dish is planning.” He said the hush-hush partnerships “suggest that Dish would compete as a disruptive ‘maverick’ … offering low prices for innovative and high-quality services.”
The dealmaking potential is huge because Ergen has the right to sell up to 50 percent of his planned wireless network to strategic partners — thanks to the Department of Justice’s antitrust chief Makan Delrahim, sources told The Post.
T-Mobile — which had to sell assets to Dish, including Boost Mobile, to win DOJ approval — had demanded Dish only be allowed to sell a 5 percent stake to any new partners, sources said. But the DOJ, in seeking to create a viable fourth wireless carrier, insisted Dish be allowed to sell a 50 percent stake to strategic investors as long as they do not include T-Mobile and Sprint rivals like AT&T, Verizon or cable companies including Comcast, sources explained.
Ergen needs strategic partners to help defray the $8 billion to $10 billion Dish says it will take to build the nation’s fourth-largest cellular network, sources said. Dish likely cannot borrow all that money from a traditional bank in a typical structure, and needs equity partners, a source close to the situation said, adding that costs to build a network could easily rise to the $15 billion range.
Sources say Dish executives have told Wall Street the company has held talks with Silicon Valley giants like Google and Amazon about its network-building plans. Google has denied any talks with Dish. Amazon didn’t return a request for comment.
In rebuffing objections to the T-Mobile/Sprint merger from 13 state attorneys general, Judge Marrero on Tuesday mentioned Amazon as a potential service provider to the new network.
“While the mobile cores of traditional networks require large amounts of hardware that are costly to install and maintain, Dish plans to construct a ‘virtualized network’ that relies more heavily on software and cloud-hosting services provided by potential partners like Amazon,” the judge said in his decision.