July 26, 2019 / 2:19 PM / 6 months ago

U.S. Justice Department expected to approve Sprint, T-Mobile deal on Friday

WASHINGTON, July 26 (Reuters) - The U.S. Justice Department is expected to announce on Friday it is approving the $26 billion merger of Sprint Corp and T-Mobile US Inc , according to sources briefed on the matter.

Assistant Attorney General Makan Delrahim, head of the department's Antitrust Division, will announce a significant merger enforcement action on Friday, the Justice Department said.

The expected approval, which would put the deal over a major hurdle, will come with conditions and a consent decree that will require the carriers to sell assets including the prepaid brand Boost Mobile to satellite TV provider Dish Network Corp , people briefed on the matter told Reuters.

Prepaid wireless phones are generally sought by lower-income people who cannot pass a credit check.

Dish will also get first rights to buy tower leases that T-Mobile decides are redundant following the deal, a source said.

T-Mobile, the third largest U.S. wireless carrier, pursued the deal in order to seek scale to compete with bigger rivals Verizon Communications Inc and AT&T Inc.

T-Mobile US on Thursday beat analysts' estimates for second-quarter net new phone subscribers who pay a monthly bill, boosted by the U.S. mobile carrier's wireless plans aimed at fending off its bigger rivals. The mobile carrier said it added a net 710,000 phone subscribers in the three months ended June 30.

Federal Communications Commission Chairman Ajit Pai has given his blessing to the merger in principle and is expected to circulate a formal order within weeks. The FCC is expected to give Dish more time to use spectrum it previously acquired but also impose strict penalties if it fails to create a consumer wireless network within a set timeframe.

But the deal, which was announced in April 2018, still faces a significant challenge.

In June, a group of U.S. state attorneys general filed a lawsuit in federal court in New York to block the merger, arguing that the proposed deal would cost consumers more than $4.5 billion annually. (Reporting by Diane Bartz and David Shepardson Editing by Paul Simao)

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