If Dish’s Clearwire bid goes through, they would likely partner with Sprint, said Dish Networks CEO Charlie Ergen yesterday in an earnings call. It wasn’t exactly earth-shattering news, but it could indicate both sides are talking.
Dish wants to acquire Clearwire spectrum covering approximately 11.4 billion MHz-POPs, which is approximately 24 percent of Clearwire’s total spectrum holdings, for $2.2 billion, notes FierceWireless. As part of the deal, Clearwire would also provide network management, construction and maintenance for a network using Dish’s AWS-4 spectrum, some 40 MHz wide in the 2.1 GHz band.
On Dish’s fourth-quarter earnings conference call yesterday, Ergen said he thought Dish’s unsolicited $3.30 per share offer for 40 MHz of spectrum and a commercial agreement with Clearwire is “clearly a better deal than what Sprint has offered,” which is $2.97 per share for control of the 50 percent of Clearwire it does not already own.
Under the FCC’s agreement with Dish that enables the company to use their satellite phone spectrum terrestrially, Dish must cover at least 40 percent of the population with a wireless network in the next four years and cover at least 70 percent of that population within seven years.
If Dish–or a future licensee of the AWS-4 spectrum–fails to hit the 40 percent mark in four years, it must hit the 70 percent coverage threshold in six, rather than seven years. Further, if Dish fails to hit the 70 percent mark in any economic area as defined by the FCC, it will automatically lose its right to deploy service there.
Dish may need Sprint’s infrastructure more than Sprint needs Dish spectrum. If Sprint’s deals with Softbank and Clearwire go through, Sprint will be sitting on more than 120 MHz of 2.6 GHz spectrum.
Still, Sprint CEO Dan Hesse said this week he’s on a hunt for more wireless spectrum.
“Clearwire would give us a strong spectrum position for a period of time,” Hesse said in an interview this month. “But we also have a very long-term view, and we would want to acquire more spectrum.”
Sprint is currently offering FD-LTE in the PCS “G” block (1910-1915/1990-1995 MHz). But it’s only 2 x 5 MHz wide. Sprint wants to buy the adjoining “H” block so it can have 2 x 10MHz (1910-1920 / 1990-2000). Observers say it may cost Sprint close to $1B.
AT&T and Verizon operate 2 x 10MHz LTE networks at 700 MHz while T-Mobile will roll out 10×10 MHz FD-LTE in the AWS band later this year.
Sprint might well be tempted to acquire the adjoing Dish (MSS) frequencies, but a 10×10 MHz block in the 600 MHz band, up for auction next year, would be just the ticket to fill in their dead zones.
Sprint would then be spectrum rich and cash poor.
Perhaps selling 40 MHz or so of 2.6 GHz would make sense. Dual-mode 700 MHz/2.6 GHz phones may be just what AT&T and Verizon will need for urban cores. The 2.6 GHz frequency is an LTE world band, likely to be used by most handsets.
Charlie’s 40 MHz is also satellite phone spectrum. Dual-mode, terrestrial/satellite communications may be just what FirstNet needs – even if they don’t know it yet. It adjoins Sprint’s G & H blocks so integration might be fairly easy.
There must be some kind of deal in there.
The difference between DISH and Sprint’s positions appears to be that Sprint wants a LightSquared-like deal: a large cash payment for the network buildout, and Sprint having the option (but not the obligation) to buy capacity, whereas DISH wants Sprint to take its payment for a network sharing agreement solely in capacity, not in cash.
Related Dailywireless articles include; DISH Proposes to Buy Clearwire, Sprint to Buy Clearwire, Dish’s Joe Clayton Talks, FCC Approves Dish Spectrum for Mobile Broadband, Sprint + Dish?, Dish: On the Move , Dish and Sprint Battle over PCS band Extension, Dish CEO: T-Mobile Partnership?, FCC Approves 2.3 GHz for AT&T, Sprint’s Dish Compromise, MetroPCS Merges with T-Mobile USA, T-Mobile & MetroPCS: Spectrum Rich for LTE-A, T-Mobile USA Upgrades to LTE, T-Mobile Gets AWS Spectrum from Breakup, Dish LTE-Advanced Called “Ollo”, Clearwire Cuts TD-LTE Deployment, Dish Talks Up Terrestrial LTE, Charlie Ergen’s Spectacular Triple Play,