T-Mobile has a network, Dish has spectrum it can't use. Oh, HELLO

Potential marriage partners look for scale to fight market giants, quad-play

cupid_648

T-Mobile US and Dish Networks are in talks about joining forces. Consolidation and quad-play are all the rage between mobile networks, and mobile networks and other networks.

The Wall Street Journal reports that the two companies have even decided that Dish boss Charlie Egan would head the beast as Chairman, with the outspoken T-Mobile boss John Legere becoming CEO.

The parties are continuing to argue over money, but both sides need it. T-Mobile is very much in the shadow of AT&T and Verizon. So much so that T-Mobile, along with Sprint, Dish and other smaller networks, have formed an alliance to petition the US government to restrict how much 600MHz radio spectrum it sells to AT&T and Verizon.

Dish is the second-biggest satellite TV network in the US and the deal would be a foil to AT&T’s acquisition of major rival DirecTV. It’s a marriage of similarly sized companies, with T-Mobile having a market cap of $31bn and Dish $33bn. Both companies have a mixture of assets, but one of the major ones Dish brings to the table is a significant amount of radio spectrum licences, which until now have been unused as Dish has not built out infrastructure. T-Mobile has plenty of that and more spectrum will help it compete with rivals.

T-Mobile is 66% owned by Deutsche Telekom, which has long been looking to sell the US operation to invest funds in developing its 4G networks in European markets. A merger with Dish would give the company scale which might make it more interesting to the Germans or ease the exit strategy.

Given the general industry-wide consolidation and particularly the AT&T deal with DirecTV, there is unlikely to be any major regulatory opposition to a merger between Dish and T-Mobile. ®


Biting the hand that feeds IT © 1998–2017