Google is in talks to help create a fourth US wireless carrier, even as Sprint and T-Mobile struggle to get their controversial merger cleared with federal and state authorities, The Post has learned.
Alan Mulally — a former chief executive at Ford Motor and a current Alphabet director — has recently been in discussions with satellite-TV giant Dish Network about a plan to create a fourth US telecom player, sources said.
The idea is for Alphabet-owned Google and Dish to launch a new wireless giant with the help of assets acquired from T-Mobile, which is now under pressure from the Department of Justice to aid such a project in order to get clearance for its $26 billion merger with Sprint, according to sources close to the situation.
“There’s no question they are talking,” a source said of Mulally and the Dish execs.
Sources added the talks are in flux and could still fall apart, and that it’s not clear whether T-Mobile and Dish would immediately announce an agreement with Google if a deal is reached.
T-Mobile parent Deutsche Telekom, faced with the fact that Dish increasingly appears to be the only viable buyer for assets it’s being asked to divest, also appears to be aware of Dish’s talks with Google and has tried to prevent the tie-up, insiders said.
Specifically, Deutsche Telekom lately has insisted that it will only sell assets to Dish if it promised not to sell more than a five-percent stake in itself to a third party, according to the sources.
“If you’re DT, you have to consider whether enabling Google is worth it,” said Walter Piecyk, an analyst at BTIG.
Nevertheless, both Dish and the Department of Justice have balked at Deutsche Telecom’s demand, and T-Mobile appears to be backing off, two sources close to the situation said, in part because of its pending Sprint deal.
Likewise, despite worries in Washington about Silicon Valley’s giants getting bigger, the feds are “not really concerned” about the prospect of Google playing a role in forming a major wireless network, according to a source with direct knowledge of the situation, because of its current discount spectrum. Google’s Fi service, which mainly leases its wireless spectrum from T-Mobile, Sprint and US Cellular, charges $20 a month for unlimited calls and texting, plus $10 a month for each gigabyte of data used.
According to BTIG’s Piecyk, Google is also interested in the Dish deal to ensure that its fast-growing cloud-computing business can compete with those of Amazon and Microsoft as wireless devices become increasingly ubiquitous.
“The cloud is becoming more reliant on the last-mile providers,” Piecyk said. “It’s in Google’s interest to make sure the last-mile provider is inexpensive.”
Dish’s billionaire Chief Executive Charlie Ergen has spent $20 billion amassing a trove of wireless spectrum that could free Google Fi from its reliance on T-Mobile and Sprint. With a purchase of key equipment and infrastructure from T-Mobile, insiders estimate Dish and Google could deploy a new, fully independent wireless network in about three years.
Nevertheless, Ergen’s deal is still expected to take at least two to three more weeks to get done. According to one source, talks are “about halfway there” after getting started several weeks ago.
And even if an agreement between Dish, Google, T-Mobile and the Department of Justice comes together, T-Mobile still needs to win in court against 14 states that are suing to block its Sprint deal. The states are concerned that less wireless competition will lead to rising prices. That trial is expected to start in October.
Google and Dish declined to comment, while DOJ and T-Mobile did not reply to messages.