Dish to pay T-Mobile $100 million to amend 800MHz spectrum option

We've been following the back and forth between Dish and T-Mobile over the former's $3.59 billion option to buy 13.5MHz of 800MHz low-band spectrum from T-Mobile. The option dates back to the complicated deals that were made to get the FCC and the DOJ to approve T-Mobile's acquisition of Sprint for $26 billion. That deal enabled T-Mobile to obtain Sprint's holdings of 2.5GHz mid-band spectrum giving it the lead in the battle to be 5G King in the U.S.

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Last month, when we last checked in on this mobile soap opera, T-Mobile was asking a court not to give Dish any additional time to exercise its option. The current financial condition of the satellite provider and the inability to get a loan or sell debt at a decent interest rate is preventing it from buying the airwaves right now. However, both sides have reached an agreement, and a filing made yesterday to the Securities and Exchange Commission (via FierceWireless) by Dish states that it and T-Mobile have agreed to an amendment that modifies the License Purchase Agreement.

The new exercise date of the option is April 1, 2024, which ironically is not only April Fool's Day, it also is the fourth anniversary of T-Mobile's closing of its acquisition of Sprint. The amendment requires Dish to make an upfront payment of $100 million to T-Mobile toward the $3.59 billion purchase price of the spectrum. The payment must be made no longer than three days after the United States District Court for the District of Columbia enters an Amended Final Judgment.

But, and this is a big but, T-Mobile now has the opportunity to shop around the 13.5MHz of 800MHz airwaves and if it does find an alternative buyer, it must still give Dish the opportunity to meet the new price from the alternative buyer. This helps with a previous complaint made by T-Mobile that the value of the 800MHz spectrum will decline while waiting for Dish to exercise or decline the option because the licenses begin to expire in March 2028.

The amendment has been approved by the United States Department of Justice, Antitrust Division, and will become effective once the District Court enters an Amended Final Judgment.

You might be wondering if Dish has a GoFundMe account or some reason why it feels optimistic about its ability to pay for the spectrum in the near future. An upcoming merger with EchoStar, a distribution agreement with Amazon, and other potentially fruitful partnerships have Dish expecting it to be much more well off before the amendment ends on April 1st.