Following Google’s example, many companies are buying other companies to expand their grasp on the world. This can become a tough thing understanding the vast competition for the same company. This happened recently when Dish Network tried to buy Sprint and Clearwire. SoftBank beat them out and now becomes the third largest mobile operator in the U.S. What will Dish Network do now? Will they look to buy another company? Will it be T-Mobile?
SoftBank’s $21.6 billion acquisition of Sprint, with Dish Network being the losing bidder, we may be seeing a stirring up the U.S. mobile industry. Led by an aggressive chairman and facing a lackluster satellite TV industry, Dish still has incentives to break into mobile and may do it through a new type of partnership or network, analysts say. Mobile services and apps are growing a lot faster than TV or relatively slow, expensive satellite Internet.
“If they don’t have some form of a wireless play, then it’s very hard for them to survive longer term,” said Chetan Sharma, founder of Chetan Sharma Consulting. That’s because consumers are increasingly watching video online rather than over broadcast, cable or satellite TV. In fact, the U.S. consumer satellite industry may soon shrink, with Dish possibly acquiring DirecTV, analysts say.
Having put together a $25.5 billion bid for Sprint, Dish could probably afford to buy the smaller T-Mobile. Dish is likely to bid for T-Mobile soon, according to Sharma. “If Dish is really serious about the wireless market it has to make a move in the next six months. Otherwise, as time goes on, SoftBank’s positioning to acquire T-Mobile becomes stronger,” Sharma said. He thinks Dish knows this and sparked bidding wars for Sprint and Clearwire just to make SoftBank pay more for its entry into the U.S.
Dish has amassed two chunks of land-based mobile spectrum and may be trying to scoop up more. Dish has two kinds of spectrum that are approved for commercial mobile use: a block of frequencies it bought in the FCC’s 700MHz auction in 2008, and the so-called AWS-4 frequencies it acquired by buying two bankrupt satellite companies in 2011. If Dish succeeds in buying another bankrupt satellite company, LightSquared, it would have yet another set of frequencies it might be able to use for cellular services. Dish Chairman Charlie Ergen reportedly has already bought a large part of LightSquared’s debt, and Dish is now offering $2.2 billion for the company.
But in the cellular world, Dish isn’t likely to build its own network, a project that would cost billions and might take years. Instead, the company will probably keep trying to buy or partner with an existing operator, analysts say. That would be a quicker and cheaper way to put its frequencies to work, which the company will have to do in order to keep its spectrum licenses.
“The logical next step for Dish would be to partner with a service provider like T-Mobile to build out in their spectrum,” said Phil Marshall of Tolaga Research. Though AT&T is also considered a candidate to work with Dish, analysts say fourth-place T-Mobile is the most likely candidate because it has the most to gain.
Forrest L. Rawls