Will Verizon Buy Dish Network Spectrum?

By Gary Kim June 20, 2014

Investment bankers love transactions: it’s one of the ways they make their money. So it is no surprise that “rumors” about potential deals “leak” to the press. Sometimes those are intentional leaks, rumors intended to test appetite and suggest possible deals.

Dish Network and Verizon Wireless have held informal talks about a Verizon purchase of the Dish Network mobile spectrum, leaks attributed to investment bankers.

Ironically, such a deal, were it to happen, would confirm a view long voiced that the spectrum play was always about spectrum squatting, more than anything else.

One of the older rumors is that Dish Network has been acquiring mobile spectrum for the purpose of selling it.

For years, some have speculated that Dish Network has had no intention of building and operating a mobile network, but simply would eventually sell to one of the other U.S. mobile firms.

Those rumors have been quite muted over the last year, as Dish Network faces strategic issues if it remains a satellite-based video entertainment provider, and arguably must build its mobile network, or lose the frequencies and billions of equity value.

Of course, there also are reasons for such rumors of a spectrum sale to surface now.

The Federal Communications Commission 700-MHz spectrum auction has been structured to limit the amount of spectrum Verizon and AT&T could win.

AT&T, for example, already has threatened to sit out the planned auctions. And Verizon could avoid the auctions as well, if it acquires Dish Network spectrum instead.

If neither AT&T nor Verizon Wireless bids, it is possible the auctions might fail, as the structure of the incentive process first requires that broadcasters agree to sell their spectrum, and that means they must be offered prices sufficient to motivate such a sale.

Most observers would say that the presence of AT&T and Verizon in any auction produces higher prices.

An effective show of disinterest by AT&T and Verizon would likely mean an unsuccessful auction, with broadcasters choosing to keep their spectrum instead of selling. That might later lead to a new auction with less-restrictive rules.

Dish Network gains by reminding potential buyers of the value of its holdings. 

Verizon also might, by making such a purchase, keep Dish Network out of the U.S. mobile market. And that would be the biggest strategic impact of such a spectrum purchase.

Telecom is not a business devoid of intrigue. 




Edited by Maurice Nagle

Contributing Editor

SHARE THIS ARTICLE
Related Articles

Four Reasons to Reach for the Cloud after World Earth Day

By: Special Guest    4/23/2018

The World Earth Day agenda offers a chance to flip the rationale for cloud adoption and highlight environmental benefits that the technology brings pr…

Read More

Bloomberg BETA: Models Are Key to Machine Intelligence

By: Paula Bernier    4/19/2018

James Cham, partner at seed fund Bloomberg BETA, was at Cisco Collaboration Summit today talking about the importance of models to the future of machi…

Read More

Get Smart About Influencer Attribution in a Blockchain World

By: Maurice Nagle    4/16/2018

The retail value chain is in for a blockchain-enabled overhaul, with smarter relationships, delivering enhanced transparency across an environment of …

Read More

Facebook Flip-Flopping on GDPR

By: Maurice Nagle    4/12/2018

With GDPR on the horizon, Zuckerberg in Congress testifying and Facebook users questioning loyalty, change is coming. What that change will look like,…

Read More

The Next Phase of Flash Storage and the Mid-Sized Business

By: Joanna Fanuko    4/11/2018

Organizations amass profuse amounts of data these days, ranging from website traffic metrics to online customer surveys. Collectively, AI, IoT and eve…

Read More