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$3.3 billion 5G deal sees Dish become friends with T-Mobile again

US mobile operators Dish and T-Mobile have settled their differences with a major new roaming agreement.

It means that customers of Dish, including sub-brand Boost Mobile, will make use of T-Mobile’s nationwide 5G network when they roam outside Dish’s network footprint, which might be quite often given how early Dish is in its own 5G deployment. Under the new deal, Dish will also pay lower rates to T-Mobile, which will apply retroactively back to 22 January this year.

The agreement needs the thumbs up from the Department of Justice (DoJ) by 14 August before it becomes effective. Once that happens, and barring any new dispute that arises, the deal will remain valid until 1 July 2027. According to an SEC filing, Dish has agreed to fork over $3.3 billion to T-Mobile for the duration of the agreement. Once the initial term expires, it will automatically renew for a successive 12 months until one of either Dish or T-Mobile decides to walk away.

In addition to roaming access, T-Mobile has also agreed to transfer to Dish those Boost-branded customers of former Sprint affiliates Shentel and Swiftel, as well as Boost-branded customers who were part of the California Public Utilities Commission CARE programme. In all, it will boost Boost’s customer base by around 100,000.

“We are pleased to have reached new terms with T-Mobile that provide Dish with the ability to be more competitive and to meet our customers’ evolving needs,” said John Swieringa, president and COO of Dish Wireless, in a statement.

“Dish’s 5G network now covers more than 20 percent of the US population, and this amendment gives our customers enhanced access to nationwide coverage and in-market roaming while we continue to deploy our own 5G network,” he said.

“While Dish customers will benefit from our network, this deal also locks in a multi-billion dollar revenue commitment for our business,” added T-Mobile’s chief marketing officer Mike Katz. “It’s a win-win.”

The amended Master Network Services Agreement (MNSA), as it is officially known, marks a thawing of relations between Dish and T-Mobile.

The two operators became entangled back in 2019 when Dish agreed to buy what was then Sprint’s Boost Mobile unit, a deal which paved the way for US antitrust regulators to green-light T-Mobile’s $26 billion acquisition of Sprint. The Boost deal came with roaming access to the CDMA network that carried Boost’s services.

However, Dish and T-Mobile fell out after the latter announced plans to shut down the CDMA network by January this year. Dish claimed it had been promised a three-year migration timeline when it acquired Boost, and that shutting down the network early would leave 9 million customers high and dry.

T-Mobile has since delayed the shutdown on multiple occasions, giving Dish extra time to migrate customers off the network. T-Mo has yet to provide a firm date for when its CDMA network will finally go offline once and for all. Furthermore, under this week’s amended MNSA, T-Mobile has agreed to provide assistance to those Boost customers who have already been migrated off the CDMA network. This includes the provision of replacement devices and marketing support so they know what’s going on and what they need to do.

It’s not clear yet what this means for AT&T. In the midst of its rift with T-Mobile, Dish last year ran into the arms of AT&T, striking a $5 billion deal that allows its 5G customers – including Boost customers – to roam onto AT&T’s network.

Now that Dish is friends with T-Mobile again, it finds itself agreeing to pay billions of dollars over the coming years to let its customers roam onto two 5G networks that have overlapping footprints. It doesn’t sound like the most financially prudent move, so it will be interesting to see whether it tries to modify the terms of either one or both of these deals in the not-too-distant future.

 

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