Satellite video’s poor reception has Dish examining US wireless

Hmm, what could Charlie Ergen be up to this time? Look to 2011 for clues. Dish Network announced on Tuesday that Mr Ergen is giving up his chief executive post to “devote more attention to the company’s emerging wireless business”. He is handing the title to Erik Carlson, a long-time employee who most recently served as the chief operating officer. Mr Ergen remains as chairman.

Deja vu has become a running theme at Dish, between the endless decline of satellite-video subscribers and the repetitious promise of a bright, futuristic vision for Dish’s role in the wireless market a market in which it’s not even a true player yet. This also is not the first time Mr Ergen has stepped back from his day-to-day CEO responsibilities to pursue grander plans. He did so six years ago and the result was a deal offensive, albeit an unsuccessful one.

Following the chief executive change in 2011, Mr Ergen began taking major steps towards potential mergers that would have given Dish more scale or advanced his wireless strategy, such as a tie-up with DirecTV or Sprint (then called Sprint Nextel). Emboldening Mr Ergen and other deal makers was AT&T’s bid that year to acquire T-Mobile – if this deal cleared, they reasoned, then other tricky transactions stood a better shot of also getting approved. But the US government ultimately stood in the way of AT&T’s T-Mobile purchase.

Fast-forward to today, and AT&T now owns DirecTV, while Sprint ceded control to Masayoshi Son’s SoftBank Group. As for Mr Ergen? He was left out. All that time, Dish’s wireless strategy was “emerging” and in flux. Not much has changed since. The company is sitting on potentially US$40 billion or so worth of unused airwaves, which trumps the $24bn market value of Dish itself, a deserving discount when investors have yet to see anything concrete. And really nobody agrees on what Dish should be valued at anyway.

In an interesting turn of events, AT&T has once again become a catalyst for attempts at further industry consolidation, and Mr Ergen wants in. AT&T is heading to court to fight for its $109bn takeover of Time Warner, a deal that is already inspiring – if not forcing – other media and telecommunications giants to explore their own transactions. Walt Disney is reportedly nearing a monster deal for certain 21st Century Fox assets, which drew interest from a number of other suitors, including Verizon Communications and Comcast. Sprint also recently, and foolishly, dropped plans to combine with T-Mobile, making itself available again for Mr Ergen. Like I said, deja vu.

Dish’s stock is down 11 per cent this year and 35 per cent from its high in 2014. While its beleaguered satellite business is probably of little interest to buyers that have shifted their focus to content, Dish does offer two very valuable assets – the spectrum, of course, and Sling TV, a growing over-the-top streaming service. Sling has not been given its fair share of attention, either inside or outside the company, which is why I have argued Dish could sell it or use it as a bargaining chip in merger negotiations as rivals may see an opportunity to run the business better.

As much as the Verizon chief executive Lowell McAdam has shot down the idea publicly, I would still not be surprised if he actually was interested in Dish’s assets. T-Mobile struck a mediocre partnership with Netflix this year, while Sprint announced a similar collaboration with Hulu last month.

Should AT&T-Time Warner survive the US justice department’s lawsuit, that would leave Verizon as the only wireless player without an entertainment offering. And that is as Comcast, the owner of NBCUniversal, and Charter Communications encroach on their wireless turf.

Mr Ergen could also look to T-Mobile, which would be a

Walt Disney is reportedly nearing a monster deal for certain 21st Century Fox assets, which drew interest from other suitors

perfect home for Sling after seeing how the chief executive John Legere was able to reinvigorate the T-Mobile brand. Or Mr Ergen could reignite talks with Sprint, but he would have to deal with Mr Son this time with, and the Japanese billionaire has made it clear he does not want to give up control. Then again, with Mr Ergen’s wireless ambitions now starting to sound a bit like Mr Son’s 300-year vision – at first intriguing, but now testing investors’ patience - they at least have that much in common.

Let us not forget The Wall

Street Journal report over the summer that Amazon has emerged as a potential partner for Dish’s wireless strategy, which Mr Ergen has pitched as being geared toward the “Internet of Things” rather than traditional mobile-phone usages. One would think if any progress had been made on that front, we would have heard about it by now, but like all Amazon rumours, it could make sense.

Whatever the outcome, it seems safe to say that Mr Ergen is putting on his deal hat.

He may have better luck this time.