Dish Network Might Bid for T-Mobile US

By Gary Kim December 19, 2013

It was only a matter of time: with rumors that Sprint is considering an acquisition of T-Mobile US, it was likely inevitable that Dish Network also would consider a rival bid.

Earlier in 2013, Dish and Sprint had battled with SoftBank over both Sprint and Clearwire. Having failed in both efforts, Dish continues to face a problem it must solve: it owns spectrum that can be deployed to build a terrestrial Long Term Evolution mobile network, using repurposed mobile satellite spectrum.

It also faces a Federal Communications Commission deadline: it has to complete a network build, one way or the other, by 2016, covering about 40 percent of the U.S. population, or it loses its license, wiping out $9 billion of equity value.

Reuters reports Dish is considering a bid for T-Mobile US in 2014, once again in rivalry with SoftBank.

One might assume Dish would have a better chance of getting regulatory clearance, since that deal would leave four national mobile operators in a market that the U.S. Department of Justice already has concluded is too concentrated.

A Sprint acquisition would reduce the number of key providers to three, an issue that has been quite controversial in Europe, where deals leading to a reduction of suppliers are controversial as well.

A reasonable observer might continue to conclude that Dish’s ultimate intentions are unclear.

Dish CEO Charlie Ergen is among those in the communications and network entertainment business who have operated on the assumption that ownership of spectrum always is valuable, either to build a business requiring spectrum, or by selling that spectrum to others.

There is a line of thinking that Dish really does not intend to build a network, but only to sell the spectrum for a huge profit. There is a venerable tradition underlying that line of argument.

But Dish also has other strategic reasons for possibly wanting to enter the U.S. mobile business. It has struggled, many would say, to compete with DirecTV in the satellite segment of the video subscription business, and the growing ability of telcos and cable companies to sell triple play bundles and quadruple play bundles puts both satellite providers at a disadvantage.

And while some have argued Dish might fare better by merging with DirecTV, that deal would face regulatory scrutiny as well, as the FCC has denied a merger between Dish and DirecTV before.

That deal would not solve the “use it or lose it” problem Dish faces with its proposed LTE network spectrum: Dish has to build or it loses the spectrum license. So some believe Dish believes it has to transition from satellite TV to mobile services, in part to create the foundation for a triple play offering. With cable operators now maneuvering to buy out Time Warner Cable, regulatory policies and antitrust issues will loom large in 2014.

Edited by Cassandra Tucker

Contributing Editor

Related Articles

Consumer Privacy in the Digital Era: Three Trends to Watch

By: Special Guest    1/18/2018

Digital advertising has exploded in recent years, with the latest eMarketer data forecasting $83 billion in revenue this year and continued growth on …

Read More

CES 2018: Terabit Fiber - Closer Than We Think

By: Doug Mohney    1/17/2018

One of the biggest challenges for 5G and last mile 10 Gig deployments is not raw data speeds, but middle mile and core networks. The wireless industry…

Read More

10 Benefits of Drone-Based Asset Inspections

By: Frank Segarra    1/15/2018

Although a new and emerging technology, (which is still evolving), in early 2018, most companies are not aware of the possible benefits they can achie…

Read More

VR Could Change Entertainment Forever

By: Special Guest    1/11/2018

VR could change everything from how we play video games to how we interact with our friends and family. VR has the power to change how we consume all …

Read More

Making Connections - The Value of Data Correlation

By: Special Guest    1/5/2018

The app economy is upon us, and businesses of all stripes are moving to address it. In this age of digital transformation, businesses rely on applicat…

Read More