Dish Network may have been shut out on its attempt to acquire a stake in both Sprint and Clearwire, but the satellite television provider and wireless spectrum holder maintains an interest in infiltrating the wireless game.
Speaking to analysts following the release of third-quarter financial results, Dish Co-founder and CEO Charlie Ergen said the company is continuing to find the right avenue in which to enter the wireless telecommunications business, including a potential deal with established carrier T-Mobile US. When asked what sort of deal that might include, Ergen said Dish would be open to just about anything.
“I think acquiring a company, selling our company, merging, partnering, those are all on the table,” Ergen explained.
Dish, which controls 30 megahertz of spectrum in the 2 GHz band as well as six megahertz of spectrum in the 700 MHz band, has in the past hinted at a potential tie-up with T-Mobile US. T-Mobile US’ management earlier this year hinted that they were “intrigued” by Dish Network’s plans, however, recent success and a recent stock offering to bolster its pocketbook ahead of planned spectrum auctions may have reduced the need for T-Mobile US to actively search out a partner.
Dish Network has been active in handling its current spectrum licenses as well. The carrier made a proposal to the Federal Communications Commission to reduce the power of its E-Block 700 MHz licenses in an attempt to reduce potential interference with the lower A-Block in exchange for an extension on the build out timeline for the E-Block. Dish Network has also pledged to bid at least $1.5 billion for the 1.9 GHz H-Block spectrum set to come to auction next year if the FCC allows Dish to convert its current 2 GHz spectrum holdings to a single block for downlink use. The FCC is expected to rule on these initiatives by Dec. 22.
Sprint was expected to be the most aggressive bidder on the H-Block licenses as they were adjacent to the carrier’s 10 megahertz G-Block licenses currently powering its LTE network deployment that was seen as needing that additional 10 megahertz to support a competitive offering in the market. Some observers noted that the H-Block pledge was a move by Dish Network to force Sprint to pay at least $1.5 billion for those licenses, hinting that Dish Network did not really have much of an interest in actually controlling the H-Block.
However, this morning Sprint announced it would not participate in the H-Block auction, which is scheduled to begin Jan. 22, and would instead focus its efforts on acquiring low-band spectrum. The carrier cited its recent Sprint Spark initiative that will see the carrier combine its 800 MHz, 1.9 GHz and 2.5 GHz spectrum bands to provide a high-speed boost to its LTE service. In addition to the 10 megahertz to 40 megahertz of spectrum Sprint already controls in the 1.9 GHz band, the carrier has access to more than 120 megahertz of spectrum in the 2.5 GHz band it secured when it purchase full control of Clearwire earlier this year.
Outside of a potential T-Mobile US deal, Dish Network is also in the midst of trying to acquire bankrupt spectrum holder LightSquared for $2.2 billion. Ergen noted during the conference call that Dish Network remained a “stalking-horse bidder” for the LightSquared assets.
Ergen noted in August that LightSquared was indeed of interest to the company, especially in getting control of its spectrum assets.
“It’s obviously a long-term play,” Ergen said. “It’s obviously something that has a lot of hoops to jump through in terms of from a regulatory point of view and in terms of a technical point of view on the spectrum. So it’s challenged, and if you could take a long view with that particular spectrum in my opinion.”
Dish noted in a July Securities and Exchange Commission filing that it had formed “L-Band Acquisition L.L.C.” with the express intent to make a bid on LightSquared’s assets, which were tied up in LightSquared’s Chapter 11 bankruptcy proceedings. LightSquared has rights to a significant amount of spectrum in the 1.6 GHz band that it was looking to use to deploy a terrestrial mobile broadband network using LTE technology. However, the carrier has so far been unable to get its hands on most of those spectrum assets due to interference concerns with certain ground-based GPS systems. The company is continuing to support its satellite-based communications service.
Complicating the LightSquared option, however, is a lawsuit filed by Harbinger Capital Partners claiming Ergen has enacted a fraudulent scheme in attempting to acquire LightSquared’s debt and thus assume control over its operations. Harbinger, which is controlled by Philip Falcone, has recently seen its control over LightSquared diminished following a bankruptcy filing.
A Bloomberg report last week claimed that LightSquared has contacted more than 90 potential interested parties looking for a partner to invest in the company. The story indicated that LightSquared was seeking an alternative to the $2.2 billion cash offer on the table from Dish Network, which has drawn scrutiny tied to Dish Network Chairman Charlie Ergen’s perceived conflict of interest in the matter. A bankruptcy auction of LightSquared’s assets, which includes spectrum in the 1.6 GHz band, is scheduled for Dec. 6.
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