* Dish would consider partnership with Sprint
* Clearwire board still reviewing the Dish bid
* Dish hopes wireless spectrum license OK'd by end-March
By Liana B. Baker and Sinead Carew
Feb 20 Dish Network Corp would consider
partnering with Sprint Nextel Corp, its rival in its
pursuit of Clearwire, Chairman Charlie Ergen said on Wednesday
following Dish's fourth-quarter results.
Ergen made the remarks on a conference call dominated by
discussions about Clearwire, the telecommunications company Dish
made a surprise $2.3 billion bid for on Jan. 8. Dish allowed
reporters to ask Ergen, who is usually press shy, questions on
the call for the first time in years.
The call was also part of the No. 2 satellite provider's
charm offensive with the media and follows Ergen's wide-ranging,
candid interview at the D: Dive into Media conference last week.
The decision to make Ergen available comes about six weeks
after the company he founded and controls was called the
"meanest company in America" by Businessweek magazine. The
feature story recounts how Ergen created a negative working
environment at the No. 2 satellite provider based in Denver.
Ergen has been particularly vocal since Dish made an offer
of $3.30 per share for Clearwire, which had already agreed to
sell itself to majority owner Sprint for $2.97 per share. A
special committee on the Clearwire board is still reviewing the
offer. The Clearwire offer raises questions about Dish's future
and Ergen's plans for the roughly $3 billion worth of wireless
spectrum he bought over the last few years.
Dish has been looking to diversify beyond its core pay-TV
business, which has matured and faces tough competition from
cable, telecom and Internet video providers.
Some analysts have speculated that Ergen bid for Clearwire
to give Dish leverage in negotiations with Sprint for a network
partnership. Ergen indicated for the first time on Wednesday
that the two issues might be related. He told analysts Dish
would be much more likely to work with Sprint if the offer for
Clearwire is accepted.
"It's not a bad deal for Sprint because they end up with a
lot of capital to help their build out," Ergen told investors.
"If that transaction was to happen, Sprint would be the most
While Ergen told investors he has "plenty of time" to work
out a wireless strategy, the company also noted that it hopes to
run wireless technology tests by the end of this year. Dish also
said it hopes its own wireless spectrum license will be
confirmed by the end of March.
For its part, Clearwire has said it might not be possible
for the company to accept the Dish offer because of conditions
pertaining to its existing agreements with Sprint. Sprint called
the deal "illusory" because it was too conditional.
Ergen, however, noted that Sprint does not yet have full
control of Clearwire and he believes Clearwire should be able to
accept his offer.
The Clearwire discussion overshadowed Dish's quarterly and
year-end results on Wednesday. It reported a lower-than-expected
quarterly profit and attracted fewer pay-TV subscribers than
analysts had hoped.
It added 14,000 pay-TV subscribers on a net basis in the
fourth quarter. Wall Street analysts were expecting net
additions of 44,000 in the quarter, according to StreetAccount
Profit fell 33 percent in the quarter as Dish spent more
money to entice new customers and paid out roughly $700 million
to settle a high-profile court battle with Cablevision Systems
Corp involving a high-definition programming joint
venture that never got off the ground.
"There is nothing in the fundamentals here that is going to
raise a red flag and at the same time it's nothing to get
excited about," said Todd Mitchell, an analyst at Brean Capital.
"Overall its a bit of a lethargic quarter."
Dish has also raised hackles with media companies with the
launch of the Hopper, a new set top box that allows customers to
skip commercials. It is currently involved in legal battles with
broadcasters CBS Corp, Comcast Corp's NBC,
News Corp's Fox and Walt Disney Co's ABC. Dish
said all the prime time broadcasters have rejected ad spots for
Quarterly revenue dropped 1 percent to $3.59 billion. Profit
fell to $209 million, or 46 cents per share, from $313 million,
or 70 cents per share, a year earlier. Analysts on average
expected earnings of 51 cents per share on revenue of $3.56
billion, according to Thomson Reuters I/B/E/S.
Dish added 78,000 net subscribers for its newly branded
rural broadband service last year, compared with a loss of 5,000
net subscribers a year earlier.
Dish said on Friday that it was writing down the assets of
its Blockbuster stores in the United Kingdom, resulting in a
pre-tax charge of $46 million in 2012, according to a regulatory
Dish sister company EchoStar Corp's quarterly
revenue fell to $786.2 million from $834 million a year ago.
Dish shares closed 6 cents, or almost 0.2 percent, down at
$36.03 on Wednesday.