UPDATE 2-Dish weighs wireless options, seeks partnership

Tue Aug 6, 2013 2:59pm EDT

By Liana B. Baker and Sinead Carew

NEW YORK Aug 6 (Reuters) - Dish Network Corp Chairman Charlie Ergen kept investors guessing about his next strategic move on Tuesday by keeping the door open to everything from a possible partnership with Sprint Corp to tie-ups with either T-Mobile US or DirecTV.

Ergen, who recently lost a battle to buy Sprint, cited a preference for a network partnership in wireless, a market that he has focused Dish's growth prospects.

The executive said in a conference call on Tuesday that T-Mobile US could be his only option left as a wireless acquisition, but noted that the No. 4 player in U.S. mobile services might not be a challenge Dish would be willing to take on.

Ergen's spoke for the first time on Tuesday since he bowed out in June from his bitter battle with SoftBank Corp to buy Sprint and smaller wireless provider Clearwire.

Dish has struggled to find a cost-effective way to use the billions of wireless spectrum it owns to offer wireless broadband services, but Ergen said he has "a lot of options" in mobile.

"I think in an ironic sort of way Sprint becomes an interesting potential partner for us," Ergen said, as he heaped praise on the company and its majority owner SoftBank and noted that he had found out a lot about Sprint when he took a look at its books as part of his efforts to buy the company.

Ergen also left open the possibility that Dish could potentially merge with rival satellite TV provider DirecTV - a deal that some analysts say would create enough savings to fund the construction of a wireless network.

While the U.S. government already blocked a deal between Dish and DirecTV in 2002, Ergen said it could be easier to get a deal approved now due to the entry of multiple new competitors into the TV market in the last decade.

"Certainly the marketplace is materially different than last time we tried to merge with DirecTV," said Ergen referring to competition from Verizon Communications and AT&T Inc and the rising popularity of Internet video services such as Netflix Inc and Amazon.com Inc.

A DirecTV spokesman declined to comment on Ergen's remarks.

Ergen also confirmed that his company is interested in buying LightSquared, the bankrupt wireless business of Harbinger Capital, the hedge-fund of Phil Falcone.

Shares of Dish, the second-largest U.S. satellite TV company, were up 40 cents at $44.92 in afternoon trading on Nasdaq as investors appeared to focus on the company's wireless prospects rather than its financial results.

Since the satellite TV business is maturing, Ergen is hoping that adding services such as wireless video would create a new avenue for growth.

Dish said it lost 78,000 net subscribers in the second quarter, which is more than the 47,000 subscriber loss analysts were expecting.

It posted a net loss in the second quarter as it took a $438 million charge related to satellite acquisitions, and reported a decline in gross pay-TV subscribers.

The company, said it took the charge in the quarter ended June on two of the three satellites it bought in 2011. In 2011, Dish bought hybrid satellite and land-based communications company DBSD North America for about $1.4 billion in 2011 and also bought satellite communications company TerreStar Networks Inc for $1.38 billion.

Dish reported a net loss of $11 million, or 2 cents per share, in the second quarter, compared with a net profit of $226 million, or 50 cents per share, a year earlier.

Revenue rose 1 percent to $3.61 billion.

Dish added about 61,000 net broadband subscribers in the second quarter, up from nearly 11,000 a year earlier. Analysts had expected 52,000.