DISH Network Chairman Charlie Ergen had reportedly approached Deutsche Telekom about a possible merger between DISH and T-Mobile USA. According to Bloomberg’s sources, DISH approached the company before it had approved an improved merger offer to MetroPCS. Deutsche Telekom said it might be interested in DISH’s offer, however it will only consider it once its merger with MetroPCS closes.
DT’s improved offer lowers the debt transferred to MetroPCS by $3.8 billion and it also reduces the interest rate of that debt by 0.5%. It also agreed to hold onto its shares for at least 18 months once the deal closes. MetroPCS pushed back Friday’s shareholders meeting to April 24th so that shareholders can consider the revised offer. P. Schoenfeld Asset Management LP, a major shareholder of MetroPCS who had been against the pending merger, was pleased by the new offer and is reconsidering its position.
DISH has wanted to break into the wireless industry for a while. It had conferred with many wireless companies about mergers, and has also considered starting its own wireless service, similar to Radio Shack. DISH even tried to purchase the remaining 49.6% of Clearwire. Now its looking to make a deal with T-Mobile in order to get its “in” in the wireless industry so that it can be more than just a satellite television company.
DISH would offer wireless/digital television bundles if it is able to secure a deal with T-Mobile. Currently, DISH Network has $10 billion in cash, making it the company with the largest cash pile compared to other U.S. television and phone providers, and also making it very capable of merging with T-Mobile. DISH’s potential merger with T-Mobile will be much more acceptable to regulators compared to AT&T’s attempted merger with the company. Unlike AT&T’s merger plans with T-Mobile, DISH merging with the company will not remove the 4th largest wireless carrier in the nation from the wireless industry, but instead reinforce its capabilities.