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Dish could bid for T-Mobile USA

As Charlie Ergen continues his hunt for spectrum, he could spark bidding war with Softbank/Sprint for the fourth US cellco

By CAROLINE GABRIEL

Published: 20 December, 2013

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Dish failed in its bids to acquire Sprint and/or Clearwire this year, as the US pay-TV firm hunts for spectrum to make its national LTE-Advanced plan viable. It may now turn its attention to T-Mobile, reports Reuters - but if it makes a bid next year, that could prompt a bidding war with Softbank, the majority owner of Sprint. The Japanese operator has ambitious plans for its US subsidiary and is said to be interested in making its own takeover offer for TMo.

A Dish/T-Mobile combination might be more palatable to antitrust regulators than the merger of the US's third and fourth cellcos, especially as TMo already snapped up the fifth, MetroPCS, in a merger earlier this year, and AT&T is to acquire the sixth, Leap. Deutsche Telekom, TMo's previous owner, is said to want to sell its remaining stake in the enlarged operator, but the terms of the deal mean that, if it were to sell in 2014, it would only be allowed to offload its shares in a single tranche.


Such deals are being justified on the basis that they make the smaller cellcos more viable as national competitors, but the Department of Justice is unlikely to want any more reduction in the number of tier one providers. A Dish deal would maintain four national cellcos while injecting additional resource into TMo, and bringing its content services and partnerships to the mobile player, enabling it to offer a quad play like the cablecos and telcos.

Dish chairman Charlie Ergen wants to create a quad play himself, to enable his satellite TV service to keep up with those of the cable operators, AT&T and Verizon. His firm holds mobile satellite frequencies acquired from two bankrupt providers and Dish has received FCC clearance to operate terrestrial LTE in these bands, but he has said the plan will only be viable if he secures additional bandwidth and a network infrastructure partner - both of which would come with TMo, which has been building out LTE in its AWS band.

Ergen has also been trying to buy another bankrupt owner of former satellite-only spectrum , LightSquared, though the would-be LTE network builder has been resisting his advances. However, he may get another shot following the collapse of a plan to sell LightSquared to a group led by private equity firm Centerbridge.

Dish has a market value of $25bn while T-Mobile has a market value of $21bn, said Reuters.

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