Raising $20 Billion is the Easy Part of Potential Sprint Acquisition of T-Mobile US

Even if the $20 billion in financing is raised, rival bids do not emerge, or not successful, and a deal is agreed to by T-Mobile US, getting a transaction approved by the Federal Communications Commission and U.S. Justice Department remains the truly hard part of the effort.

When AT&T tried to buy T-Mobile USA, the U.S. Depart of Justice argued that the U.S. mobile market already was so concentrated DoJ could not allow the deal to proceed.

DoJ also favors having four national competitors in the U.S. mobile industry, an opinion that likely is shared nearly universally among national regulators.  

For that reason, some believe Dish Network would have advantages in any buyout effort, as antitrust issues arguably would be less. At least in principle, were Dish able to buy T-Mobile US, market structure would not be affected.

None of that would change what many observers believe about long term market structure, which is that, ultimately, the market will only support three major competitors. The simple empirical observation is that the two strongest providers--Verizon Wireless and AT&T Mobility--are gaining share and revenue, while the two smaller carriers struggle.

And some would argue Dish Network is almost impelled to make a bid. The former mobile satellite spectrum Dish Network wants to use to support a terrestrial Long Term Evolution network has a market value estimated at $9 billion. 

If Dish Network fails to meet its construction obligations, though, the FCC has the right--indeed, the obligation-- to revoke the license, wiping out $9 billion worth of equity value. 

Were it to acquire T-Mobile US, Dish Network also would nearly double in size, and escape the confines of the "satellite TV" segment of the market Dish now occupies. 

Dish also would gain the ability to offer triple play or quadruple play services. 

Sprint likewise arguably sees a Sprint combination with T-Mobile US the fastest way to increase existing market share and level the competitive playing field with both AT&T Mobility and Verizon Wireless. 

Though a potential Sprint purchase of T-Mobile US poses major regulatory issues, regulators also have to ponder the other major deals that also could be proposed in 2014, including major cable TV mergers, or even a merger between Dish Network and DirecTV, should Dish fail in any bid to acquire T-Mobile US.

And some will continue to argue that the only long term way the smaller providers ever will catch up to AT&T Mobility and Verizon Wireless is on the strength of a combined Sprint and T-Mobile US, with initial market share substantial enough to rival the other two service providers.

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