INTRODUCTORY NOTE
On April 1, 2020, T-Mobile US, Inc., a Delaware corporation (“T-Mobile”), and Sprint Corporation, a Delaware corporation (“Sprint,” collectively with T-Mobile, the “Sellers”), completed the previously announced business combination (the “Merger”) between T-Mobile and Sprint pursuant to the Business Combination Agreement, dated as of April 29, 2018, as amended, by and among T-Mobile, Sprint, and the other parties thereto. As a result of the Merger, Sprint became an indirect wholly-owned subsidiary of T-Mobile.
On July 1, 2020, T-Mobile and Sprint completed the previously announced divestiture of Sprint’s prepaid wireless business to DISH Network Corporation, a Nevada corporation (“DISH”), pursuant to the terms and conditions of the Asset Purchase Agreement, dated as of July 26, 2019 (as amended, the “Asset Purchase Agreement”). Pursuant to the terms of the Asset Purchase Agreement, DISH acquired Sprint’s prepaid wireless business, which was historically operated by Sprint under the Boost Mobile, Virgin Mobile and Sprint prepaid brands, including customer accounts, inventory, contracts, intellectual property and certain other specified assets (but excluding the Assurance brand Lifeline customers and the prepaid wireless customers of Shenandoah Telecommunications Company and Swiftel Communications, Inc.), and assumed certain related liabilities (collectively, the “Prepaid Business Sale”).
On July 1, 2020, in connection with the closing of the Prepaid Business Sale, the Sellers and DISH entered into a Master Network Services Agreement (the “MNSA”). Pursuant to the terms of the MNSA, DISH would receive network services from T-Mobile for a period of seven years, including (i) legacy network services for certain Boost Mobile prepaid end users on the Sprint network, (ii) T-Mobile network services for certain end users that have been migrated to the T-Mobile network or provisioned on the T-Mobile network by or on behalf of DISH, and (iii) infrastructure mobile network operator services to assist in the access and integration of the DISH network.
Item 1.01 - Entry into a Material Definitive Agreement
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a. |
General: On June 15, 2022, T-Mobile, DISH, and their applicable wholly-owned subsidiaries (the “Parties”), entered into and executed a binding Term Sheet dated June 15, 2022 (the “Term Sheet”). The Term Sheet reflected certain prior discussions with the U.S. Department of Justice’s Antitrust Division (the “DOJ”), as required by the terms of the Final Judgment entered into on April 1, 2020, among T-Mobile, DISH, the DOJ, and certain plaintiff states named therein (the “Final Judgment”). The Term Sheet is subject to approval by the DOJ in accordance with the Final Judgment. If the DOJ does not approve the Term Sheet within 60 days following June 15, 2022 (August 14, 2022), the Term Sheet will be terminated, unless the parties agree to extend this period. |
In addition to binding the Parties to certain material modifications of the overall commercial relationship, the Term Sheet requires T-Mobile and DISH to negotiate in good faith an amendment to the MNSA and any other necessary agreements in order to further effectuate such modifications. These modifications include, as described further below, certain bilateral roaming arrangements and restrictions, commitments relating to the migration of customers off of Sprint’s legacy code division multiple access wireless network technology (“CDMA”) network, changes to DISH’s pricing and available discounts, and the addition of DISH minimum purchase commitments. Until such time as the definitive agreements are entered into (and whether or not any such definitive agreements are ever finalized, executed, and entered into), the Term Sheet, and all of the obligations contained within the Term Sheet, shall remain in full force and effect and binding upon the parties (subject to the DOJ approval noted above).
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b. |
Roaming: T-Mobile and DISH have agreed to enter into a standard bilateral roaming agreement with an initial term ending on July 1, 2027. Thereafter, the bilateral roaming agreement will automatically renew for successive twelve-month periods until terminated by either one or both parties in accordance with its terms. In connection with the bilateral roaming agreement, the parties will also enter into an inter-operator discount agreement that will expire on July 1, 2027, and pursuant to which DISH will receive certain pricing reductions for roaming usage on the T-Mobile network. Under the terms of the discount agreement, T-Mobile will provide nationwide roaming coverage, including in-market roaming, and will facilitate customized handover of network services from DISH’s network to T-Mobile’s network at the borders of specified DISH markets. |