Dish Network could become a wholesale wireless capacity provider, perhaps in partnership with Sprint, and its spectrum could well be worth more in that scenario than it would be if Dish sold the airwaves, according to a new report from financial analysts. Such an arrangement could eventually net Dish around $10 billion in revenue per year, according to the analysts.
The market continues to undervalue Dish Network's spectrum holdings, and Dish will continue to be part of M&A discussions through 2015, according to a report from by Jefferies analysts. The massive bids in the ongoing AWS-3 spectrum auction are contributing to the situation, they added.
The AWS-3 spectrum auction, the FCC's first major auction since 2008, kicked off with a bang. The first round of bidding drew provisional winning bids on 1,012 licenses. That totals around $1.767 billion in bids, or around 16.7 percent of the total $10.587 billion reserve price the FCC has set for the auction. A total of 1,614 licenses are up for grabs across 65 MHz of spectrum, including 15 MHz of unpaired uplink spectrum in the 1695-1710 MHz band.
After years of buildup and preparation, on Nov. 13 the FCC will formally kick off Auction 97, better known as the AWS-3 auction. It will be the largest and most consequential auction of airwaves since the 700 MHz auction in 2008. 65 MHz of spectrum is going to he be auctioned. Who is going to bid? Who is going to win? And how much money are they going to spend? FierceWireless has compiled a handy primer to consult as the auction gets underway.
There continues to be speculation about whether Dish Network will angle to buy T-Mobile US or partner with Sprint to make use of its more than 50 MHz of wireless spectrum. However, according to a new research note from New Street Research analyst Jonathan Chaplin, Dish's best path forward could be to sell its spectrum to either Verizon Wireless or AT&T and still keep its satellite TV business.
Verizon Wireless and Dish Network are battling over whether the forthcoming auction of AWS-3 spectrum should include rules that require interoperability with Dish's AWS-4 airwaves.
Dish Network Chairman Charlie Ergen did not get control of Sprint or Clearwire this spring. However, from the looks of things now, he seems to be on a glide path to gain control over bankrupt LightSquared's spectrum.
Dish Network filed a new proposal with the FCC that the company said would allow it to deploy an LTE network across its 700 MHz E Block and AWS-4 spectrum holdings. Dish is asking the FCC to set a new buildout deadline on its 700 MHz spectrum that would require the company to cover 40 percent of the population covered by its licenses by 2017 and 70 percent by 2021.
Dish Network indicated it does not plan to "meaningfully participate" in the FCC's upcoming auction of 1900 MHz PCS H Block spectrum, which could have large implications for Sprint and its competitors.
Dish Network CEO Joseph Clayton said the company is still looking for a wireless carrier to partner with to build out its planned LTE Advanced network, but he seemed to rule out Sprint Nextel as a partner.