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Dish bows out of battle with Sprint over Clearwire
People walk past a Sprint store in New York December 17, 2012.
Credit: Reuters/Andrew Kelly
(Reuters) - Dish Network Corp (DISH.O) has bowed out of the battle for mobile service provider Clearwire Corp (CLWR.O), marking the second major blow in less than a week against Dish chairman and founder Charlie Ergen and his plan to expand into wireless.
The decision, announced on Wednesday, officially put an end to a bidding war between Dish and Clearwire's majority owner Sprint Nextel Corp (S.N), and raised questions about what options Ergen has left in as he tries to expand beyond satellite TV services into the U.S. wireless market.
Dish was driven out by Sprint's increased offer for Clearwire the week before. Sprint's offer of $5 per share trumped the $4.40 per share proposal from Dish and won the support of a key group of dissident Clearwire shareholders.
Analysts and investors have been questioning what kind of deal or partnership Ergen will look for next. Several analysts have said his best option could be to make a bid for No. 4 U.S. mobile provider T-Mobile US Inc (TMUS.N), whose majority shareholder is Deutsche Telekom AG (DTEGn.DE). Dish declined to comment on the prospects for a T-Mobile deal or on its future plans for wireless.
"It's an option," said a source familiar with the matter, referring to a T-Mobile US deal.
But the person, who asked not to be named, added that T-Mobile was not the only possible partner. The source noted that Ergen has always said he would pursue all of his options.
As recently as 2011, Deutsche Telekom tried to leave the U.S. market and some analysts saw the merger of T-Mobile USA with smaller U.S. company MetroPCS earlier this year as another possible step towards an ultimate exit.
Dish has already invested more than $3 billion to buy its own wireless airwaves, but it has no experience building wireless services or competing with large rivals such as Verizon Wireless (VZ.N)(VOD.L) and AT&T Inc (T.N).
As a result Ergen has said in the past he would prefer not to enter the market alone and would favor a partnership with an established operator.
"I don't think they've given up on wireless. They need to have access to one of the wireless operators' subscriber base," Brean Capital analyst Todd Mitchell said referring to Dish.
Sprint and Dish had been battling since January over Clearwire's valuable wireless airwaves and vying to buy out minority shareholders.
On Friday last week, Dish also retreated from a larger battle to buy No. 3 U.S. mobile provider Sprint. Sprint shareholders voted on Tuesday in favor of a sweetened takeover offer from Japan's SoftBank's Corp (9984.T).
Clearwire's minority shareholders will vote on the Sprint bid on July 8. Sprint had to raise its offer for Clearwire three times because of pressure from shareholders.
(Reporting by Liana B. Baker and Sinead Carew in New York; Editing by Gary Hill and Andre Grenon)
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12 MHz. A Block, 2 MHz GB, 6 MHz E Block that gives you 20 MHz of prime 700 low band spectrum. The main reason AT&T and Verizon have good networks don’t drop as many calls is the 800MHz and 700 MHz low band spectrum it owns. OK so dish can have a killer state of the art network with a LTE Advance 150 Mbps. speeds and blow pass AT&T and Verizon . About $1 billion for control of Leap,$3 billon for the 700 MHz. A block spectrum which all together will give dish about 80 MHz. of spectrum which will include 20 MHz. of prime 700 MHz. spectrum and 20MHz. of PCS and AWS spectrum. $3 billion to upgrade all top 25 markets with LTE Avance running at 150 Mbps. speeds. Price $7 to $10 billion. If dish wants it can buy some more 600 MHz. spectrum in the auction to fill in any of the holes in the network for a few more $billon no big deal. Charlie, it will be like playing a 3 – 5 of clubs for big rise from pocket Ace’s. And you hit the flop hard, A , 2, 4 of clubs. The set of Ace’s is drawing dead.
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