SoftBank and Sprint = Romeo and Juliet

editor's corner

I've been watching for signs of a Dish Network (NASDAQ: DISH) get-together with Sprint Nextel (NYSE:S) since late 2011, due to a conversation I had with an acquaintance who did not work in the telecom or cable industries but who knew a number of Dish employees. Those folks had been talking about Charlie Ergen's plans to build a new wireless network using satellite spectrum he had acquired, and they also mentioned that Sprint was probably going to be a player in this network.

Do I think my acquaintance could have predicted Dish's $25.5 billion bid for Sprint? No, not really. Do I think, perhaps, the dice was loaded from start? Maybe.

There have been rumors of a Sprint-Dish hookup for months across the wireless industry. Further, Sprint and Dish have had a number of employees bounce between the two over the years. One example is Jimshade Chaudhari, who for the past couple years has been Dish's director of product marketing and management, overseeing a portfolio of products spanning online, mobile, interactive TV and connected devices. He was formerly Sprint's general manager of wireless data services.

Given the proximity of Englewood, Colo., to Overland Park, Kan, it's not a huge surprise that Sprint and Dish might have some personnel history in common. One would imagine, therefore, that both companies are fairly familiar with one another, more so than Sprint and Japan-based SoftBank despite the friendship between Dan Hesse and Masayoshi Son.

On the face of it, Dish has a lot more to offer Sprint than SoftBank, whose main advantage was a dowry full of cash. But that dowry has now been usurped by Ergen's offer, which represents a 13 percent premium to the value of the existing offer by SoftBank, according to Standard & Poor's Ratings Services.

In addition, Dish has spectrum, loads of spectrum, which Sprint could probably put to use fairly quickly. Plus, the multi-screen possibilities involving Dish's Pay-TV business and Sprint's wireless network are compelling. Not only that, Dish and its sister company EchoStar have some compelling assets--including Sling Media placeshifting technology and Hughes Communications satellite technology--that could come into play.

"In our view, a combination of Sprint Nextel and Dish would likely offer material strategic and operational benefits, which could better position Sprint Nextel to compete with AT&T (NYSE:T) and Verizon (NYSE:VZ), even compared with a Sprint Nextel-SoftBank combination," said Standard & Poor's.

I've been looking forward to a SoftBank-Sprint marriage, figuring the twosome would really shake up the U.S. wireless arena. A Dish-Sprint pairing would also have marketplace impacts, but my impression is they'll be less fun.

After all, while SoftBank is known for its unusual advertising and innovative marketing campaigns (think Tommy Lee Jones, a talking dog and cool accessories), my main impression of Dish's marketing efforts stems from months of irritating and unwanted telemarketing calls that I received from its outbound call center when the company was trying to sign me up for its pay-TV service. The calls only stopped after I repeatedly fibbed to Dish's telemarketers that I didn't own a TV set.

Ultimately, however, it looks as though Sprint could land in the arms of Dish. I thought about SoftBank the other day when I heard Dire Straits' "Romeo and Juliet" on the radio. Will SoftBank find itself pleading with Sprint, asking, "How can you look at me as if I was just another one of your deals?"

Unless SoftBank can come up with an amazingly sweetened offer, I suspect it will soon realize "it was just that the time was wrong" for it to succeed as Sprint's suitor. And I think that's a darn shame because I was really looking forward to seeing some merriment in the U.S. telecom market.--Tammy

P.S. Do you think a Dish-Sprint combo would bring innovative new service offerings to the market? Vote in the poll on our home page.

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