Published reports indicate that Verizon Wireless is eyeing a possible acquisition of Dish Network’s spectrum assets in a deal that could be valued as high as $17 billion.
The New York Post reported that a Verizon Communications executive “told a group of insiders” about the interest, according to “a banker with direct knowledge of the conversation.” The story adds that a second un-named source said the two firms have held informal talks.
Dish owns in excess of 40 megahertz of spectrum around the 2 GHz band, having earlier this year picked up 10 megahertz of spectrum during the Federal Communications Commission’s H-Block auction, as well as smaller holdings in the 700 MHz band it picked up during an auction in 2008. The company, which currently is focused on its satellite television operations, has attempted to enter the commercial wireless space. The company last year put in offers to acquire Clearwire and Sprint, having in both occasions been out-bid by Japan’s Softbank.
More recently, Dish Chairman Charlie Ergen has hinted that he would be open to a possible deal with T-Mobile US, though recent rumors suggest Softbank and Sprint were on the verge of making an offer to acquire T-Mobile US.
Verizon Wireless has recently shown increased interest in so-called “mid-band” spectrum in support of its LTE network. That network is currently supported by the carrier’s low-band 700 MHz spectrum in covering more than 300 million potential customers as well as the recent addition of 1.7/2.1 GHz spectrum to bolster capacity as part of its XLTE marketing initiative.
Analysts have noted that Verizon Wireless has stated an increased interest in the Federal Communications Commission’s AWS-3 spectrum auction scheduled for later this year that will include 50 megahertz of spectrum in the 1.7/2.1 GHz band set aside for commercial services. This interest has come at the expense of the more controversial 600 MHz incentive auction that is currently scheduled to begin in mid-2015.
In terms of a Dish Network bid, some think such a course of action will likely wait until after the AWS-3 auction concludes.
“We reiterate our view that [Verizon] is likely to bid aggressively at the AWS-3 auction on as much as 30 megahertz of spectrum and we think both [Verizon] and [AT&T] would like to shut [T-Mobile US] and [Dish] out of the auction strategically by gobbling up all 50 megahertz,” noted Macquarie Capital analyst Kevin Smithen in a research report. “As such, we do not believe that [Verizon] would bid on [Dish] spectrum until it has secured at least 20 megahertz in AWS-3.”
The New York Post story adds that Verizon CEO Lowell McAdam had recently stated he had no interest in acquiring a satellite television provider, which could indicate that the company was only interested in Dish Network’s spectrum holdings. The comment also seemed to put Verizon Wireless in a different mindset from rival AT&T, which recently put in a $48.5 billion offer to acquire satellite television provider DirecTV.
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