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Dish seeks more time to oppose Sprint - Softbank deal

While racking up $1.5bn in Christmas debt

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Dish has asked the US regulator for more time to oppose Softbank's takeover of Sprint. Meanwhile it's stacking up the cash to fund its own network plans - which remain shrouded in mystery.

Japan's Softbank wants to buy Sprint, for $20bn or so, and Sprint wants to spend $2.2bn of that to buy out Clearwire, giving the resulting company 185MHz of US spectrum, compared to AT&T's 83MHz, Verizon's 77MHz and Dish's 40MHz of just-refarmed bandwidth into which it hopes to deploy a mobile-phone network. Dish has asked the FCC for three weeks more so it can file its petitions against the Softbank deal.

Just before Christmas, Dish Networks issued $1.5bn in promissory notes, giving it a big chunk of cash it now needs to spend on something useful to bring in the New Year. But building a national network is really expensive - estimates can hit $40bn and even LightSquared's box-of-frogs plan would have cost $7bn, so there's no little chance of Dish building a network without significant partnerships.

According to the company, the money was raised "for general corporate purposes, which may include spectrum-related strategic transactions", and Bloomberg notes that it follows a $2bn bond issue in September which is now trading at $1.11 on the dollar, so whatever the plan is the markets seem happy to support it.

Dish has permission to deploy mobile telephones in the spectrum it owns, which was formerly restricted to satellite use. The same permission was given to LightSquared, only to be whipped away again when the GPS industry got upset but that won't happen to Dish whose frequencies only neighbour a band which features in Sprint's acquisition plans.

Satellite watcher Tim Farrar reckons the money would let Dish bid for that block instead, allowing it to do a deal with LightSquared to switch round uplink and downlink bands and the frequencies LightSquared owns which are far enough from the GPS bands to avoid interference issues. The LightSquared business model is in tatters these days, so it will be keen to realise any value it can, though one technicality remains.

As Sam Churchill over at Daily Wireless reminds us, both Dish and LightSquared own flying satellites, designed to provide satellite telephony across America and currently operating fine. Those birds fulfil the licence requirements, even if satellite telephony has proved economically impossible. However, neither of them can change frequencies so if the deal proposed by Farrar happens they'll be billion-dollar white elephants.

The alternative is to sell the newly valuable spectrum, probably to AT&T, perhaps spending this cash to increase the portfolio with cast-offs when LightSquared finally hits the ground in the next few months. Whatever decision Dish reaches, it puts one's concerns about how to spend £20 in WH Smiths tokens into perspective. ®

The smart choice: opportunity from uncertainty

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