UPDATE 2-Dish chairman says bid for T-Mobile possible now Sprint is out

Wed Aug 6, 2014 3:18pm EDT

(Adds Ergen comments on spectrum, analyst comment; updates shares)

By Liana B. Baker and Lisa Richwine

NEW YORK/LOS ANGELES Aug 6 (Reuters) - Dish Network Corp Chairman Charlie Ergen said it makes sense for the satellite operator to consider making a bid for T-Mobile US Inc now that Sprint is out of the picture.

"Certainly to the extent that Sprint either dropped out or wasn't interested or the government wouldn't allow it ... then T-Mobile is something that we would have an interest in," Ergen said on Wednesday on a conference call after Dish reported quarterly results.

Investors have been watching for any signs of what Ergen plans to do with the spectrum the company has spent billions stockpiling over the past few years.

Possible plans include a partnership with another wireless player or building or buying a wireless network. While the company's core pay TV business has stalled, Dish shares have risen more than 40 percent to $63.81 over the past 12 months mainly on investors' high hopes for the value of the company's spectrum.

Late Tuesday, Sprint Corp dropped its planned bid to acquire T-Mobile U.S. Inc, the No. 4 U.S. carrier, after regulatory hurdles proved too steep, people familiar with the matter told Reuters.

Ergen said he was not surprised that Sprint walked away from T-Mobile and called it a "smart move," considering the public resistance from regulators.

"Sometimes the best deals you do are the ones you walk away from, and it takes a lot of guts to do it," he said.

Ergen said Sprint's abandoned plans for T-Mobile likely increase the options for his company, but executives have not yet discussed their plans. Still, the "announcement last night probably increased some optionality," he said.

Dish may face some competition to win T-Mobile from French telecom company Iliad, which threw its hat into the ring with a $15 billion offer last week, T-Mobile's parent company, Deutsche Telekom, has shown no interest in engaging with Iliad so far.

Many investors have believed that Verizon Communications Inc would step in and buy all of Dish or all of its spectrum, said Craig Moffett, senior analyst at MoffettNathanson.

"Now, investors will have to get comfortable with a wider array of possible outcomes," he wrote in a research note.

Ergen reiterated that it was possible Dish would sell its spectrum but that was not his preferred option.

"Unless we can build a business that's more valuable than the core value, we're a seller," he said. "But if we can build a business long term that's actually more valuable than the core value, then we're going to go do that."

"We're long-term players," he added. "If you want somebody to flip some spectrum, make a quick buck, go buy somebody else."

Dish shares rose 1.6 percent, or 99 cents, to $63.14 in late-afternoon trading on Nasdaq. (Reporting by Lisa Richwine and Liana B. Baker; Editing by Lisa Von Ahn, Richard Chang and Leslie Adler)