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T-Mobile Slides After Dish Taps AT&T as Network Service Provider

T-Mobile US Inc. suffered its worst stock decline in more than five months after rival carrier AT&T Inc. became the network provider for Dish Network Corp. in a $5 billion deal.

Under the agreement announced Monday, AT&T will become the main network for Dish, a satellite-TV company that is expanding into wireless-phone service. Dish also will let AT&T access its trove of airwaves.

Dish’s wireless ambitions had been aided by T-Mobile, and Wall Street sees Monday’s deal as a blow for that company. As part of its merger with Sprint Corp. last year, T-Mobile sold assets to Dish that included its Boost Mobile prepaid wireless service. Dish also got network-sharing rights from T-Mobile, an agreement that regulators hoped would help turn the satellite company into a new national wireless carrier.

But Now Dish is cozying up with AT&T, “a possible negative headwind on T-Mobile,” according to Citigroup Inc. The arrangement also could help set the stage for AT&T and Dish to merge their pay-TV businesses. AT&T is in the process of offloading its DirecTV operations in a joint venture — a move that could ultimately lead to a Dish deal.

In any case, the network-service agreement potentially makes Dish a fiercer competitor in wireless service at a time when the industry is shifting to speedier 5G service. As part of the accord, Dish will pay AT&T at least $5 billion over 10 years for network access.

T-Mobile shares fell as much as 3.9% to $143.57, marking the biggest intraday drop since February. They had been up 11% this year through the end of last week. AT&T lost as much as 2.6%, while Dish was up fractionally.

Source: Bloomberg