Earlier this week, the New York Post reported Google has been in talks with Dish Network to create a fourth wireless carrier in the United States—despite T-Mobile and Sprint’s continued troubles getting their merger approved by federal and state governments. Alan Mulally, Director of Google’s parent company Alphabet, has been discussing the deal with Dish, according to the Post’s sources.
The plan would be for Google and Dish to use the assets acquired from T-Mobile to help the companies create a big, new wireless carrier. The Department of Justice has been pressing T-Mobile to assist in this type of project to get its $26 billion merger with Sprint approved, according to sources.
“There’s no question they are talking,” a source said of Mulally and the Dish execs.
Google has disputed any talks are happening however. “These claims are simply false. Google is not having any conversations with Dish about creating a wireless network,” a Google spokesman said.
Sources also said that these discussions could still fall through and it’s unknown if T-Mobile and Dish would announce an agreement right away with Google if a deal is secured. People familiar with the matter have also said Deutsche Telekom, T-Mobile’s parent company, appears to be in the know about Dish’s discussions with Google and has tried to prevent the tie-up, the Post reports. Deutsche Telekom recently insisted it would only sell assets to Dish if it’s assured no more than a five percent stake in itself would be sold to a third party.
“If you’re (Deutsche Telekom), you have to consider whether enabling Google is worth it,” BTIG analyst Walter Piecyk to the Post.
Meanwhile, Dish and DOJ have been resistant to Deutsche Telekom’s demands. T-Mobile also looks to be backing off, according to sources, because of its pending deal with Sprint. Additionally, the federal government has not expressed much concern about Google’s potential involvement in creating another major wireless company because its phone plan, Google Fi, is relatively low cost. The service, which leases wireless spectrum from T-Mobile, Sprint and US Cellular, costs $20 a month for unlimited calls and texting and $10 a month for every gigabyte of data used.
Piecyk also stated Google expressed interest in the Dish deal to ensure its growing cloud computing business could compete with Amazon and Microsoft as wireless devices’ presence continues to grow, according to the Post.
“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 Chief Executive Charlie Ergen has spent $20 billion collecting wireless spectrum that could unleash Google from its dependence on T-Mobile and Sprint. If Dish purchased key assets and infrastructure from T-Mobile, it could deploy an independent network in approximately three years, according to industry insiders.
However, Dish’s deal with T-Mobile could still take another few weeks to be finalized. Talks are “about halfway there,” according to sources. If an agreement between Dish, Google, T-Mobile and the DOJ is formed, T-Mobile still faces a court case against 14 states that are suing to stop its merger with Sprint. The suit stems from the states’ concern the deal could decrease wireless competition, leading to hire prices.