Verizon cited as potential candidate for Dish spectrum at the right price
With T-Mobile US rumored to be in the sights of a potential acquisition by any number of deep-pocketed cable providers, long-time suitor Dish Network could find Verizon Communications a possible partner for its vast spectrum holdings.
Oppenheimer analyst Tim Horan noted in a report, with excerpts published by Investor’s Business Daily that there was just a 10% chance of a Dish Network bid for T-Mobile US, with Verizon the only likely suitor for Dish Network’s spectrum holdings, though he did not expect Verizon to “pay a premium.” Verizon was relatively subdued in its bidding activity during the record-breaking AWS-3 auction, forking over less than one-fourth of the auction’s total haul in potential winning bids.
After the auction, Verizon said that while it was content with its spectrum position, it remained open to spectrum acquisitions on the secondary markets or leasing deals with spectrum holders. Speaking during a conference call, Verizon’s management noted that with the spectrum gained from its $10.4 billion in winning bids, the company had no plans to make any large spectrum acquisitions in the near term. However, the company did say it might look toward potential deals on the secondary markets, although its near-term focus was to make more efficient use of its current spectrum holdings.
The company said it now has an average of more than 40 megahertz of spectrum in the 1.7/2.1 GHz band in 92 of the country’s top 100 markets, and 116 megahertz of total spectrum nationwide. Those holdings include 48 megahertz in the 1.7/2.1 GHz band spread between AWS-1 and the newly acquired AWS-3 bands; 22 megahertz of spectrum in the 1.9 GHz band; 22 megahertz in the 700 MHz band; and 24 megahertz in the 850 MHz band.
Dish recently lost a $3 billion bidding credit tied to the auction haul of a pair of designated entity partners that are now on the hook for around $13 billion from the recent AWS-3 auction. Dish Network CEO Charlie Ergen stated that should Dish lose that credit, it could look to separate its vast spectrum holdings into a separate business, which could then look to maximize the value of those assets.
Dish owns a fairly substantial swath of spectrum ranging from the 700 MHz band up to the lower 2 GHz band, with some of those holdings downlink-only channels that are seen as particularly valuable for streaming video content. AT&T recently noted that Dish Network is sitting on an average of 81 megahertz of spectrum across the nation’s top 100 markets, with most of that in so-called midband locations.
Dish got itself into a bidding war with Softbank over an attempted acquisition of Sprint, which Dish eventually lost. The company bounced back with comments that it might be looking at a similar deal with T-Mobile US, though has so far not put in an official bid.
A partnership between Dish and Verizon could also play into the carrier’s increased attention into the video space. The telecom operator said it plans to launch a mobile-first video service by the end of summer that is reported to use the Go90 brand. A deal with Dish could open up additional video avenues for Verizon, including tapping into Dish Network’s Anywhere service that uses technology from Sling Media.
Such a move could also counter AT&T’s aggressive move in tying together its mobile service with its recently acquired DirecTV assets. The carrier has already begun to offer consumers bundled service options, with expectations that AT&T will eventually further integrate DirecTV’s video content with its cellular service.
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