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Dish, T-Mobile In Talks To Merge

Both sides previously sought mergers with other companies 6/04/2015 09:00:00 AM Eastern

Englewood, Colo. — Dish Networks, which failed in 2013 to buy cellular carriers Clearwire and Sprint, is at it again, holding talks to acquire T-Mobile, the Wall Street Journal reported.

The merger would enable Dish to diversify beyond the stagnant satellite-TV business, potentially deliver video content to TVs and mobile devices, and provide Dish-owned wireless spectrum to T-Mobile. Deutsche Telecom, which owns 67 percent of T-Mobile, has shown an interest in selling T-Mobile, which is rapidly growing its dealer base but losing money. Both companies are known as low-cost providers in their respective markets.

Dish has amassed a pile of spectrum with the intent to enter the wireless-phone business, but a merger with T-Mobile would enable it to tap T-Mobile’s expertise in building and running networks.

Dish itself said it wants to diversify beyond its mature satellite-TV business and possibly use wireless spectrum to offer triple-play packages combining home phone and broadband service with satellite-TV service. Dish could also deliver subscription-TV content to smartphones if it secures such rights.

Analysts said a potential merger between Dish and T-Mobile is more likely to pass muster with federal regulators than a merger between Sprint and T-Mobile. The two carriers were in talks in 2104 to merge, but talks were called off after regulators informally indicated they would oppose a reduction in the number of national carriers to three from four.

The Journal reported the two sides have agreed that Dish chief executive Charlie Ergen would become chairman, and T-Mobile president/CEO John Legere would become CEO. A purchase price hasn’t been decided.

Said industry analyst Jeff Kagan, “Dish Networks has quite a bit to gain.” Traditional television, whether cable or satellite TV, is moving toward an IPTV model, he said. “Without a deal with a wireless company like T-Mobile, Dish will limit its future growth potential.”

In addition, Kagan said, the deal could enable Dish to deliver television over cellular, enabling consumers to “watch on any device, at any time, from any place.” Such capabilities, he said, represents “the future of the television space as it rapidly reinvents itself.”

 

 

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