T-Mobile US and Dish Network are reportedly in preliminary merger talks, and that could open up new spectrum for their competitors.
“We don’t think this is what the FCC had in mind for Dish’s spectrum (preferring a buildout) and will most likely require substantial spectrum sales,” wrote analyst Kevin Smithen of Macquarie Securities. “We note that Dish has not yet finalized its AWS-3 spectrum with the FCC so that further complicates regulatory negotiations.”
Dish invested in two small companies that were bidders in the recent AWS spectrum auction. Both companies qualified for discounts because their annual revenues qualified them as “designated entities” according to the Federal Communications Commission. But the spectrum has apparently gone to Dish, a $14 billion (revenue) company which does not qualify as a designated entity. So now the FCC is reportedly considering revoking the group’s bidding credits, which totaled about $3 billion.
Dish’s spectrum shenanigans are just one piece of a complex puzzle that would need to come together if Dish and T-Mobile US were to actually merge. The toughest fit would almost certainly be the union of Dish Chairman Charlie Ergen and T-Mobile CEO John Legere, two of the most outspoken individuals in wireless or any other industry.
Just yesterday, Inc. Magazine described John Legere as “the profanity-spewing shock jock of corporate America” in a tweet. This morning on Twitter, a former Dish employee described Charlie Ergen as “an old-style, factory system industrialist.”
The Wall Street Journal reported on the possible deal today, saying if the companies merge, Ergen will be chairman and Legere will be CEO.
