Dish's Ergen: Without wireless partner, we'll put 'for sale' sign on spectrum
Dish Network (NASDAQ: DISH) Chairman Charlie Ergen said that his company wants to use its 40 MHz of AWS-4 spectrum to create a wireless network to allow customers to access video content as well as voice and data inside and outside the home. He said that Dish would like to partner with a wireless company to do that, but that if Dish cannot, it will look to sell its airwaves.
"We want to compete against both the cable guys and the wireless guys, and we want to do it inside the house and outside the house, and that's why we think we need wireless spectrum," Ergen said in an interview at the AllThingsD D:Dive Into Media conference. "We'd like to own a wireless network so we can give you a quality of service."
Ergen said the cable companies focus on delivering voice, video and data inside the home and wireless carriers focus on that when people are on the go. Dish wants to do well at both, he said, which is why the company needed to get the FCC to approve the terrestrial use of Dish's spectrum.
In a wide-ranging interview, Ergen touched on many hot topics related to Dish's wireless ambitions. He said part of the reason Dish bought Blockbuster was to sell wireless service and products at Blockbuster stores. "Because we got delayed on wireless (by the FCC), it hasn't worked out exactly as we planned," he said.
Ergen has repeatedly said that Dish would like to find a partner to help it build its wireless network. However, he said absent that, Dish might be forced to sell is spectrum. "We would admit we failed and try a new approach," Ergen said, according to Bloomberg. "We would hang a 'for sale' sign on the spectrum." Dish paid $2.78 billion for its spectrum, but now that it has been reclassified by the FCC for terrestrial use, analysts have said it is worth much more than that.
Dish filed a trademark application last week for the brand "Racecar," which the company said could be used for a wireless broadband service. However, since receiving FCC approval to use its spectrum for terrestrial mobile broadband in December, Dish has been coy about its plans.
Dish's most recent move in wireless was to bid $3.30 per share for Clearwire (NASDAQ:CLWR) to counter Sprint Nextel's (NYSE:S) $2.97 per share offer to buy the 50 percent of Clearwire that Sprint does not already own. The Dish deal has many complicated provisions, and Clearwire's board has said it is reviewing the Dish offer but still recommends the one from Sprint. Some analysts have said the counter bid could be just a maneuver by Dish to gain leverage in partnership talks with Sprint.
Financial analysts have said that Dish's bid is unlikely to succeed. However, Dish's bid, along with pressure from Clearwire's minority shareholders, could motivate Sprint to raise the value of its final offer for Clearwire. Ergen said Dish's bid is not "illusory" as Sprint has claimed but that "the deck is stacked against us."
Still, he said Dish's offer is better for Clearwire's shareholders. "Sprint will have to do something different than they are doing today to keep us out," he added.
Dish wants to acquire Clearwire spectrum covering approximately 11.4 billion MHz-POPs, which is approximately 24 percent of Clearwire's total spectrum holdings, for $2.2 billion. As part of the deal, Clearwire could sell or lease an additional 2 MHz of its spectrum to Dish and it could also provide certain services such as network management, construction and maintenance for a network in the AWS-4 spectrum.
- see this AllThingsD article
- see this separate AllThingsD article
- see this Bloomberg article
- see this Engadget article
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