AT&T’s $50 billion bid for DirecTV has fueled new speculation about wireless phone companies Sprint and T-Mobile and satellite television provider Dish Network.
Dish, led by its hard-charging chairman, Charlie Ergen, comes out the loser in the big merger involving his rival DirecTV. And that’s motive for Ergen to chase some kind of deal, according to analysts sampled by Bloomberg News.
And that casts Dish and Sprint as potential rivals — or partners — going forward.
Analysts at Citigroup and Credit Suisse see Dish potentially bidding for T-Mobile but with an obvious potential counteroffer coming from Overland Park-based Sprint, Bloomberg said.
Under a different scenario, Dish could deliver video content to Sprint, T-Mobile or Verizon in the same way DirecTV would bring content to AT&T in their deal.
Unconfirmed reports say Sprint is working on a bid for T-Mobile despite strong signals from regulators in Washington that a merger between the No. 3 and No. 4 wireless carriers would not be welcome.
A Sprint spokesman declined to comment Monday on the AT&T deal as well as speculation about any further deals.
AT&T is not expected to have trouble gaining regulatory approval. Bloomberg said that Buckingham Research Group sees a 90 percent chance of winning Washington’s OK.
And that heightens Sprint’s desire to strengthen its own hand and particularly by additional subscribers through a T-Mobile merger, according to Jennifer Fritzsche, an analyst at Wells Fargo Securities. Combined, Sprint and T-Mobile still would be No. 3 in wireless subscribers but much closer to industry leaders Verizon and AT&T.
“We actually believe this news helps (not hurts) their cause for a potential merger,” Fritzsche wrote in a note to clients.
Shares of Sprint gained 11 cents Monday to close at $9.12.
Last week Ergen said he’d be eager to bid for T-Mobile, though not to get in another bidding war with Sprint, which is 80 percent owned by Tokyo-based SoftBank Corp.
Ergen lost a bidding war last summer in which SoftBank gained control of Sprint, and Sprint, backed by SoftBank’s checkbook, snapped up airwaves-rich Clearwire Corp. Ergen so wanted Clearwire that Dish made a run at buying Sprint.
Dish is interested in the wireless world because it owns billions of dollars worth of licensed wireless airwaves that could carry cellular traffic. But Dish has no network of towers to carry the calls, texts and Internet access that would travel on its airwaves.
Bloomberg said Wells Fargo’s analysis sees Ergen working on a partnership with either T-Mobile or Sprint. The wireless carriers would provide the network, and Dish would provide the airwaves, the kind of business deal Sprint has repeatedly said it’s interested in doing.
Sprint also has to be watching what AT&T can do with the video content connections it will be gaining from DirecTV. At first it will sell the satellite service alongside its own phone and broadband products. But they plan to integrate them as well.
“What it does is, it gives us the pieces to fulfill a vision we’ve had for a couple of years — the ability to take premium content and deliver it across multiple points: your smartphone, tablet, television or laptop,” AT&T chief executive Randall Stephenson told analysts on Sunday.
Reports said the companies’ deal may be contingent on DirecTV being able to renew its current NFL Sunday Ticket deal with the National Football League.
And that puts Sprint’s attention back on Dish, said Berge Ayvazian, senior consultant at Heavyreading.com.
“The only response they have is partnering with Dish, which is why I think it’s very likely,” Ayvazian said.
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