Dish Holding Spectrum Cards

Posted by Sam Churchill on

Dish Wireless, owned by Charlie Ergen, is in jeopardy amid industry deals, reports Bloomberg. Ergen’s Dish Wireless has 40 MHz of unused broadband wireless licenses in the 2.1 GHz band.

Ergen got the frequencies by shrewdly buying bankrupt satellite phone providers TerraStar for about $1.38 billion, and DBSD (formerly ICO) for about $1.4 billion.

For the last 18 months, Dish has been waiting for the FCC to define rules so Dish can put its airwaves into use for terrestrial LTE.

Dish, the second-largest U.S. satellite TV provider after DirecTV, has been planning to offer wireless Internet service in partnership with existing mobile operators.

Meanwhile, Japan’s Softbank has agreed to take control of Sprint Nextel for $20.1 billion and T-Mobile USA plans to merge with MetroPCS. Those deals take four possible partners off the market for as long as 12 months, Ergen said.

Sprint and Deutsche Telekom remain potential partners, according to Ergen. He told Bloomberg he prefers not to sell Dish’s spectrum to a company such as AT&T, although he will if there are no other alternatives. Selling the airwaves, for which Dish paid about $3 billion, would position the company with “more cash but in the same mature business it’s already in,” Ergen said.

Dish won’t partner with Verizon, even if it’s “smart business” because the largest U.S. wireless provider struck a deal to market products from rival cable companies, reports Bloomberg.

Apparently the squabble with Sprint is over the spectrum. Sprint hopes to add another 5Mhz x 2 on the PCS band, but it abuts the Dish spectrum. If Dish is forced to move 5 MHz up the band (2005-2025 MHz), then, Dish claims, it would require a long delay as standards bodies and chip companies re-tool for the unique spectrum swath.

Dish’s wireless aspirations could also be the catalyst to getting a deal to merge DirecTV and Dish approved, Ergen said. A similar proposal to merge DirecTV and Dish in 2001 was disapproved by the Department of Justice in 2002. Ten years ago, regulators blocked a deal between the largest satellite television providers for anti-competitive reasons, saying millions of rural customers would have only one choice for TV

Combining DirecTV’s 19.9 million satellite TV subscribers with Dish’s 14.1 million customers would create the largest U.S. video provider. The combined 34 million households translate into “75 million potential handset users day one” if they also become Dish wireless subscribers, Ergen said.

The 40 MHz of 2.1 GHz is the last big chunk of prime spectrum available in the United States. What are Ergen’s options?

  • If Ergen sells the spectrum to AT&T for $8-$10 billion, then the satellite business may continue to slowly fade.
  • If Ergen partners with Sprint, then profits would take years and could conflict with Softbank or Clearwire’s plans for 2.6 GHz
  • If Ergen partnered with DirecTV for competitive LTE phone service, he’d have to spend another $4-$6 billion to build the nationwide terrestrial infrastructure.

Of course there is another option…América Móvil. Carlos Slim runs the fourth largest mobile network in the world and owns Tracfone Wireless in the United States, along with NET10, Straight Talk, SafeLink Wireless, and SIMPLE Mobile brand names.

Related Dailywireless articles include; Sprint Gets Majority Control over Clearwire, MetroPCS Merges with T-Mobile USA, DirecTV Partnering with Clearwire?, Dish Planning Internet-based TV Service?, Clearwire: On the Hot Zone , Aero Prevails, FCC to Okay Verizon/Cable Spectrum Buy, T-Mobile Gets AWS Spectrum from Breakup, Verizon Buying Nationwide AWS Spectrum from Cable, 300 MHz Expected from Refarming and TV Spectrum, AT&T Wants 2.3 GHz for LTE and T-Mobile USA Upgrades to LTE, T-Mobile and MetroPCS Petition FCC for Dish Spectrum, Cable MSO’s Create “CableWiFi” Network, Time Warner Cable Beams Muni WiFi, AT&T: Free WiFi (with Video Ads) and Carrier WiFi Moves Ahead

Posted by Sam Churchill on Wednesday, October 24th, 2012 at 8:25 am .

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