Dish's Ergen: We won't fight a Sprint bid for T-Mobile

BARCELONA, Spain--For Dish Network (NASDAQ: DISH) Chairman Charlie Ergen, it may be a case of "once bitten, twice shy." Ergen said he would stay out of a potential bid by Sprint (NYSE:S) for T-Mobile US (NYSE:TMUS).

Ergen lost out to Japanese carrier SoftBank for Sprint and also to Sprint for Clearwire last year. There have been persistent rumors that Sprint is contemplating a merger with T-Mobile. There have also been reports that Dish might make a bid for T-Mobile.

However, on the sidelines of the Mobile World Congress trade show here, Ergen told the Wall Street Journal that Sprint and T-Mobile would be able cut costs by merging in ways that he couldn't match, and that SoftBank has more money than Dish so a bidding war would be pointless.

Ergen made similar comments last Friday on Dish's fourth-quarter earnings conference call. "I think Sprint has indicated their interest in T-Mobile," he said, according to a Seeking Alpha transcript. "And certainly, we've had experienced competing against SoftBank, and we're realistic to know that we are not going to outbid SoftBank in any transaction. I think that SoftBank has conquered us into submission there. So to the extent that they're going after T-Mobile, I don't think you're going to see us engaged in that."

The Dish chairman added: "If you are pounding your head against the wall and it hurts, I believe you quit pounding your head against the wall. And I think SoftBank is bigger and stronger than we are."

SoftBank CEO Masayoshi Son has publicly pushed for a deal between Sprint and T-Mobile, arguing that without consolidation no company can close the gap with Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T).

Despite the bitter fight from 2013, Sprint is now working with Dish Network on a trial of fixed wireless broadband service in Corpus Christi, Texas.

At the same time, Dish is preoccupied with other wireless opportunities. The auction of the 1900 MHz PCS H Block is close to being finished and Dish is still likely going to be the winner of the airwaves. The H Block is a 10 MHz block of paired airwaves that runs from 1915-1920 MHz (for the uplink) and from 1995-2000 MHz (for the downlink). Dish controls spectrum adjacent to a portion of the H Block, called AWS-4; Dish's 40 MHz of AWS-4 spectrum specifically runs from 2000-2020 MHz (for the uplink) and 2180-2200 MHz (for the downlink). However, Dish asked the FCC to let it use the 2000-2020 MHz band for downlink operations instead of uplink as a condition for agreeing to bid the reserve price.

Meanwhile, on Monday a federal bankruptcy court judge said LightSquared can move ahead with a restructuring plan over the objections of Dish, its largest creditor. Judge Shelley Chapman approved the framework of LightSquared's plan, which means the company can lobby creditors to support its plan before a hearing on final confirmation next month. However, LightSquared still faces many hurdles.

Ergen said LightSquared's plan would treat his claims unfairly. LightSquared has said in a separate lawsuit that Ergen built up his debt position illegally.

For more:
- see this WSJ article (sub. req.)
- see this Seeking Alpha transcript
- see this Reuters article
- see this Bloomberg article

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