Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
“You got to know when to hold ’em, know when to fold ’em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done.
Now ev’ry gambler knows that the secret to survivin’
Is knowin’ what to throw away and knowing what to keep.
‘Cause ev’ry hand’s a winner and ev’ry hand’s a loser,
And the best that you can hope for is to die in your sleep.”
–Kenny Rogers singing to Charlie Ergen.
Of course, this was not really a song sung by Kenny Rogers to Charlie Ergen, but with what has happened over the past week, perhaps this is some good advice from one gambler to another.
This is of course much better advice than I could ever provide when it comes to gambling, as I base my strategy on what Wesley Snipes once said:
Ergen, as chairman of Dish Network, looks to have hit a wall in his attempts to both/either acquire a stake in Clearwire or purchase Sprint Nextel. Though it was not for a lack of trying.
A quick recap shows that Sprint Nextel and Softbank re-jiggered their deal in a move that pretty much shut out any attempt for Dish Network to pick up Sprint Nextel, which Dish Network seemed to catch the hint on when it announced this week that it was basically backing away from that proposed transaction.
As for Clearwire, Sprint Nextel increased its offer for Clearwire that also included a termination fee that Clearwire would have to pay should the deal fall apart. That offer was so good that Clearwire’s board shifted their alliance from Dish Network’s previous offer to now backing Sprint Nextel.
To most, this would be considered a tough week, but this is Charlie Ergen we are dealing with here. I am sure he has somehow found a way to make a few billion off this whole fiasco, so I say hold off on the sympathy cards. Plus, Dish Network is still sitting on a nice barrel of spectrum that in this day and age is worth more than gold to wireless carriers.
And, with that stash of spectrum, the question now becomes where does Dish Network go from here?
Unlike in the real world where time is often cited as the cure for ill will, in the business world billions of dollars tends to soothe battle scars. If Sprint Nextel and Softbank can see past what has transpired over the past six months, they will realize that Dish Network is still sitting out there with a nice cache of spectrum and obviously no interest in getting into the wireless market on its own.
A more compelling possibility comes from the conspiracist in me that keeps thinking Ergen is too smart of a guy to not have known that either of these deals were long shots, even for him. I have to figure that maybe Ergen got into these tussles not so much as to actually come out the winner in either, but instead in making sure that both Sprint Nextel and Softbank sank as much money as possible to come out on top. These were deals both of those two companies – Sprint Nextel perhaps more than Softbank – needed to close.
In making sure the maximum amount of money was eventually paid to Clearwire and Sprint Nextel shareholders, Ergen could have reduced the amount of available capital Sprint Nextel, and more to the point, Softbank would have lying around to re-invest in the Clearwire and Sprint Nextel network.
All of this was done just so Ergen could then turn his attention to what he really wants: T-Mobile US. There is a carrier with a current parent in Deutsche Telekom that has already once tried to get rid of its U.S. subsidy when AT&T came knocking, and more recently reduced its interest in the carrier following its acquisition of MetroPCS.
Bringing an extra bushel of spectrum to the table, along with a few billion dollars, would seem to be right in the wheelhouse for DT. Plus, T-Mobile US is already rocking the “un-carrier” marketing, which seems to be a mentality Ergen lives his life by. Sounds too crazy? Perhaps. But we are dealing with Ergen here, and I am not yet willing to doubt his business acumen.
While the Sprint Nextel/Clearwire train might have left the station for Dish, I hope, hope, hope that this is not the end of Dish’s involvement in the wireless space. This industry needs, needs, needs Charlie Ergen. That man is entertainment, something most of the executive suites of current carriers sorely lack.
So come on Charlie! Don’t walk away from the table just yet. We need you!
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–You gotta feel a bit bad for our neighbors north of the border. Sure, they invented hockey, have polar bears as house pets and are provided with all the free maple syrup they can digest, but have you seen what they pay for wireless services? I know they pay using Canadian money, but still, I think it’s a lot.
And, oh yeah: three-year contracts are the norm.
Just to show how desperate Canada is for some competition, there seems to be enthusiasm behind reports that Verizon Communications is looking at entering the space through the acquisition of a smaller player. You know things are bad when Verizon is seen as a competitive disruptor.
Hopefully there might be some change in the clean, crisp Canadian air with a new emphasis by the government to infuse some competition into the space. Of course, previous attempts to do just that have come up a bit short.
Good luck Canada, and thanks again for helping to keep the Lower 48 polar bear-free.
I welcome your comments. Please send me an e-mail at [email protected].
Bored? Why not follow me on Twitter?
