But what T-Mobile’s parent company wants to be included in an agreement are words to the effect that the MVNO contract will be terminated if another company buys a controlling stake in Dish Network. What Deutsche Telekom is seeking to avoid is a situation where a deep-pocketed cable company, or a company like Amazon, takes control of Dish Network and reaps the benefits of the MVNO agreement with T-Mobile.
Despite the deadline, Faber says that the tone is more optimistic than pessimistic. But that doesn’t appear to be the case on Wall Street. We can gauge how investors are feeling about the possibility of the merger closing. Each Sprint stockholder will receive .10256 of a T-Mobile share for each share of Sprint they currently own. By multiplying T-Mobile’s current stock price of $77.54 by .10256, we get the value that each Sprint share will be worth if the deal were to close right now. For example, based on the current prices, Sprint holders will own $7.95 worth of T-Mobile for each share of Sprint in their possession. But Sprint is trading at $6.86 right now. The difference of $1.09 is considered wide and indicates that investors do not believe the deal will go through. At one point last month, the spread was only 67 cents.
The DOJ is worried about replacing Sprint in order to prevent price hikes by Verizon and AT&T
The Justice Department’s concern is that by merging T-Mobile and Sprint, the number of major U.S. carriers drops by 25%. The agency fears that having one less major wireless provider will allow Verizon and AT&T to raise prices willy nilly. Others see something else; a strong T-Mobile-Sprint could prove to be an even more worrisome competitor as far as the two largest wireless operators are concerned. T-Mobile is presently the fastest growing of the major U.S. carriers and arguably the most innovative. The DOJ wants Dish to step in and develop a replacement for Sprint.
Regardless of what Deutsche Telekom decides, this long-running drama could come to an end by next week at the latest.