Dish Network, claimes to be the nation’s 2nd biggest cable provider, and T-Mobile, the very outspoken fourth player in the country’s “four carrier” wireless industry (at least according to the FCC) are said to be discussing a possible merger scenario, with some claiming a very positive outcome for the two companies is close at hand. If true, the industry could witness one of the biggest mergers between traditional media and communications companies, both of which are being threatened by the growing strength of the Internet.
But anyone who has been keeping tabs on T-Mobile would know that it ain’t happening until the papera are signed. Despite gunning for the top position in the mobile carrier rankings, T-Mobile has time and again been the subject of either merger or straight out acquisition. In the latest episode, talks between T-Mobile and Sprint fell through when the FCC made it clear that they prefer to keep the four horse race instead of having only three. Just last April, T-Mobile CEO John Legere practically pimped his company, hinting that it is ripe for the picking for a possible merger. Apparently, Dish was listening. Again.
Dish has been reported to eye T-Mobile in the past. It has been impressed by the way the carrier rose from being an underdog to one of the most aggressive players in the market. And it is in need a wireless carrier of its own. Dish has been planning on launching its own service bit doesn’t have the experience and infrastrucutre to do so. At the same time, it just recently purchases a huge amount of spectrum from the FCC, a spectrum that is more useful for carrying data than anything else. In other words, a spectrum that is right up T-Mobile’s ally.
If the merger does push through, Dish chief exec Charlie Ergen will take the position of chairman of the merged two companies. T-Mobile CEO John Legere, on the other hand, will take that same position in the combined company. The outcome of this merger could very well influence another merger currently in the works as well. AT&T, T-Mobile’s bitter rival, is said to be close to sealing a billion dollar deal with DirecTV, Dish’s ow rival.
While the outlook about the discussions seems to be largely positive, talks are still at a “formative stage” where many important questions remain unanswered. These include the actual purchase price. Then there’s the issue of Dish CEO Egren himself. Dish has, in the past, been close to a few transactions, only for talks to fall through at the last meaning, earning Egren a reputation of being difficult to get to close a deal.
SOURCE: The Wall Street Journal