Reports of a possible merger between Dish and T- Mobile surfaced back in 2014 though nothing happened. Now it seems the merger talks are picking up again, according to Wall Street Journal. The WSJ report states that the two are reportedly in talks of a merger and the combined company would be led by Dish head Charlie Ergen as chairman while T-Mobile chief John Legere would don the role of a CEO.
The deal still in “the formative stage” of talks, said the Journal, citing people close to the matter who think that the possibility of an agreement is highly unlikely. If the merger somehow happens, it could work out in favor of the two, notes WSJ. It would be one of the latest multi-billion-dollar telecoms mergers.
Both companies have a net worth of $30 billion, and a deal should create a successful cross platform. As WSJ reports, Dish also has a billion of dollars’ worth in wireless licenses, something that T-Mobile would be interested to make full use of. Dish has nearly the same spectrum as T-Mobile, and together the two would have more capacity compared to rivals including AT&T or Verizon, as per a report last month by Recon Analytics.
However, the amount of spectrum isn’t as significant as the type of spectrum, which is clearly indicated by the fact that AT&T and Verizon are still market leaders despite Sprint having more spectrum.
The top two carriers apparently capture a hefty chunk of low-band spectrum, which is primarily the reason as to why T-Mobile still lags way behind. However, this could all change, as Dish’s holdings can easily fill this void for T-Mobile, as Dish holds low-band licenses in the lower 700MHz range. T-Mobile did say that it owns a few 700MHz licenses as well though believes it needs more low-band spectrum.
While the merger does seem to have the potential to give T-Mobile exactly what it needs to expand its network – a low band spectrum for better coverage. It would make sense for Dish too as they can potentially go beyond just satellite distribution.
“Dish lacks the robust broadband Internet service that cable companies can lean on to offset a declining TV business,” notes The WSJ. “It also has amassed billions of dollars of wireless licenses but hasn’t built the cellular network needed to put them to use. T-Mobile’s wireless service would help address both needs.”
Dish has been pretty innovative within the TV space with the Hopper and SlingTV while T-Mobile has been disrupting the wireless business for better transparency. As long as they keep innovating both before and after a merger, this could be a very good thing, and the duo can keep putting pressure on AT&T/DirecTV, Verizon, and others.
It’s somehow interesting to note how large media companies are eying wireless carriers. AT&T is closing in on a $49 billion DirecTV deal very soon while Charter recently acquired Time Warner Cable for $78.7 billion. While earlier there were talks between Sprint and Dish, however, it did not work out.