Bigger dish
U.S. satellite provider may finally seal a wireless deal and swallow T-Mobile.
NEW YORK • Dish Network Corp. and T-Mobile US Inc. are discussing a deal to combine the secondlargest satellite TV operator in the United States with the fourth-largest wireless carrier, a person familiar with the matter said on Thursday.
A deal would join a wave of tie-ups in the telecom and TV industries as companies look to add services for customers. The talks between the two companies are at an early stage and important aspects of the deal such as a price and structure have yet to be determined, the source said, asking not to be identified because the negotiations are confidential.
Representatives at Dish and T-Mobile US did not immediately respond to emails seeking comment. A spokesman for Deutsche Telekom, which owns about 66 per cent of T-Mobile US, declined to comment.
The two sides have agreed T-Mobile chief executive John Legere would serve as the CEO and Dish CEO Charlie Ergen would become the combined company’s chairman, the Wall Street Journal, which first reported on the news, cited sources as saying.
T-Mobile has a market capitalization of about US$31 billion, while Dish’s is around US$33 billion.
“It is clear that Deutsche Telekom is looking for future prospects in the United States,” a source close to Deutsche Telekom’s management board told Reuters.
Dish and T-Mobile US have previously floated the possibility of a deal. Ergen said earlier this year he was “impressed” by T-Mobile US, while Legere said it made sense for T-Mobile US to team up with Dish.
“If the (speculation) proves to be correct and the companies really are in serious talks, we suspect it will flush out competing bidders, perhaps for both T-Mobile and Dish,” Jonathan Chaplin, an analyst with New Street Research, wrote in a research note.
Dish, a surprise winner in the record-setting U.S. sale of airwaves for mobile data in January, has amassed wireless spectrum and recently went into streaming TV to offset the loss of pay-TV subscribers. However, what Dish plans to do with its newly acquired spectrum remains unclear.
T-Mobile US has been looking to buy spectrum from smaller rivals, according to media reports.
The company has turned around years of subscriber losses through various initiatives which have led to customer gains, but they have pressured its margins.
Last year, Deutsche Telekom tried to sell T-Mobile to Sprint Corp, but the No. 3 U.S. carrier dropped its bid amid regulatory resistance. French operator Iliad SA also abandoned its attempt to buy T-Mobile US last October.
T-Mobile US’s rival AT&T Inc is close to wrapping up its US$49-billion takeover of Dish competitor DirecTV, while Charter Communications Inc. is seeking to remake the U.S. cable television industry by acquiring larger rival Time Warner Cable Inc. for US$56 billion.