The recent decision by EchoStar, the parent company of Dish Network, to sell $23 billion worth of spectrum to AT&T marks a significant retreat from the company’s ambitions to establish itself as a key player in the wireless market. Many analysts had anticipated that this initiative would struggle, despite optimistic projections from the Trump administration and other stakeholders involved.
In 2020, the Trump administration approved T-Mobile’s $26 billion merger with Sprint, despite widespread warnings from unions, economists, and consumer advocacy groups. They cautioned that the merger would negatively impact competition in the U.S. wireless sector, leading to job losses, poorer service, and increased prices—all of which soon manifested.
Following the merger, T-Mobile cut over 9,000 jobs, and competition among wireless providers declined sharply, with T-Mobile increasingly mirroring the practices of its erstwhile competitors.
The approval process for the T-Mobile-Sprint merger was notably hurried, with the Trump administration’s officials not fully reviewing its implications. Makan Delrahim, the head of the Department of Justice’s antitrust division at that time, faced criticism for allegedly assisting the merging companies in navigating the approval process. Furthermore, T-Mobile’s increased spending at Trump-owned properties raised ethical concerns about the merger process.
In an effort to mitigate the negative repercussions of the merger, Trump officials crafted a convoluted arrangement that involved Dish acquiring Boost Mobile and spectrum assets from T-Mobile to create a fourth competitor in the wireless market. However, this plan was viewed as fundamentally flawed from the outset.
Regulatory bodies in the U.S., often seen as lenient towards telecommunications companies, struggled to provide effective oversight for this initiative. The remaining industry leaders, AT&T and Verizon, had strong incentives to lobby against the emergence of a new competitor.
Dish Network’s inexperience in the wireless sector soon became apparent, as reports surfaced highlighting issues with their 5G network, including limited device compatibility, inconsistent coverage, and significant connectivity issues.
As per the federal agreement, Dish was to ensure that its new network could reach 75% of the U.S. population, but the company soon began to miss crucial deadlines and debt payments, prompting the FCC to extend timelines to avoid a total collapse of the project.
In light of ongoing financial challenges and looming bankruptcy, Dish later executed a merger with EchoStar in 2023, claiming it would create a leading entity in both terrestrial and satellite communications.
As whispers of Dish’s wireless plans began to fade, major players like AT&T and SpaceX began showing keen interest in acquiring Dish’s spectrum assets. In May, the FCC initiated an investigation into the compliance of Dish and EchoStar with 5G requirements following concerning reports.
This scrutiny from the FCC, led by Brendan Carr, triggered backlash from various advocacy groups and unions, revealing widespread concern over regulatory actions that jeopardized even existing capabilities.
EchoStar’s deal to offload spectrum licenses to AT&T signifies a decisive end to Dish’s aspirations of becoming a competitive wireless carrier. This transaction strengthens AT&T’s position in the market while undermining any remaining hopes for remedying the competitive disadvantages introduced by the T-Mobile and Sprint merger.
The sale also proved lucrative for EchoStar, which had originally acquired the spectrum for $13.5 billion. Following the announcement, EchoStar’s stock saw a substantial increase, boosting its prospects for future investments, particularly in satellite technology.
Despite setbacks, analysts believe Dish may still possess about $30 billion worth of spectrum assets that could be liquidated to major telecommunications companies in the future.
Forecasts indicate that additional spectrum sales may be on the horizon, potentially fetching even higher prices than expected.
Unfortunately, Dish’s strategy appeared primarily designed to keep regulators appeased while waiting for its spectrum assets to appreciate in value, all while diverting attention from the negative impacts of telecom consolidation.
A 2024 study from Rewheel highlighted that the merger between T-Mobile and Sprint effectively ended any significant competition in wireless pricing in the United States.
The study revealed that, five years post-merger, the U.S. mobile market had become one of the most expensive in the world, with prices plateauing or falling at a much slower pace than prior to the merger.
Meanwhile, T-Mobile, previously viewed as a disruptive force in the industry, has increasingly adopted the same practices as dominant players Verizon and AT&T—much to the dismay of its former CEO, John Legere, who once criticized them relentlessly. The merger touted as a job creation catalyst has instead led to significant layoffs.
Warnings from economists and consumer advocates about the merger’s repercussions were largely overlooked by government officials throughout the approval process. The consequences have manifested in a situation that some deem costly and entirely avoidable.
The second term of the Trump administration has seen a continued trend of approving telecom mergers, likely to lead to further job losses and declining service affordability. Coupled with a diminishing role for federal regulatory and consumer protections, the outlook for consumers appears grim for the foreseeable future.
