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Will Its Break-up With T-Mobile Push Sprint to Shift Focus to Dish Network?

August 16, 2014 | About:
Quick Pen

Quick Pen

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Sprint (S), the third largest U.S. carrier has been trying to join forces with fourth largest carrier T-Mobile (TMUS) from a long time. But it finally gave up on its run for the carrier, which seems to have created a setback.

Sprint’s parent Softbank has been very ambitious regarding its position in the U.S. It has huge plans to become a strong prominent players in the U.S. telecom wireless industry by emerging as a stronger contender to the larger players AT&T (T) and Verizon (VZ). So as part of its strategy, it had decided to acquire T-Mobile to edge closer to the telecom biggies. However, this plan has got smashed, which means that Sprint has to make another formula to get more competitive. So let’s consider the most likely option available?

Wish for Dish?
Though its endeavor to combine with T-Mobile has fallen through, there are other options that Sprint may weigh. The most convenient one is considering a deal with Dish. All this while when Sprint and T-Mobile were in serious talks, Dish was a mere sideline observer. But past the rift between the two wireless carriers, Dish seems to have become an active participant. This situation, where Sprint is looking for a key partner while T-Mobile is off the list, brings to life the satellite TV provider’s long longed desire to enter the telecom wireless world.

Dish has been quite interested to make its way in the mobile broadband world through a national telecom partner. The company has tried to strike a deal on several occasions, but nothing turned out to be fruitful. Even when Softbank was trying to form a deal and buy majority stake in Sprint, Dish had made a rival offer to the Kansas carrier in hope to get into the wireless platform. And before this, when Sprint had made a bid to acquire Clearwire, Dish again interfered by making a rival offer.

Over the years, the second largest satellite-TV carrier in the U.S. has acquired huge airwaves to become more attractive to the telecom providers. The company plans to use these valuable airwaves to build a wireless network and assist an existing telecom company expand its capacity.

Sprint and Dish could consider combining assets together and making a strong set-up to contest others. The two together could become a formidable combination in the mobile industry. Dish’s airwaves and Pay-TV services are valued at $26 billion, which could be a huge meaningful addition to Sprint’s existing assets. A similar deal between a telecom carrier and a satellite-TV provider is running in parallel – AT&T and DirecTV (DTV). The two are currently seeking for the regulators’ approval. In case Sprint and Dish actually plan to combine, the two too would have to get the deal approved by the FCC and the DoJ. And getting the deal approved would be comparatively easier than AT&T’s and DirecTV’s proposal. AT&T being a bigger player is facing tougher scrutiny. However, Sprint might stay a bit relaxed.

Departing Thoughts
At this point of time, when Sprint and T-Mobile are no more in terms with each other, Dish could want to take advantage of the situation and quickly initiate talks with Sprint before it starts working on other options. If Sprint lacks interest in combining with Dish, then the latter can consider to develop talks with T-Mobile. Let’s wait and watch how each of the three, Sprint, T-Mobile, and Dish is strategizing the upcoming moves.

About the author:

Quick Pen
A seasonal writer with a Management Degree in Finance and interests in automotive, technology, telecommunication and aerospace sectors.

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