Dish still searching for wireless partner, but seems to rule out Sprint

Dish Network (NASDAQ: DISH) 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 (NYSE:S) as a partner.

dish CEO Joseph Clayton


In a year-end interview with the Denver Business Journal, Clayton noted that major deals have reshaped the wireless landscape in recent months and that there will likely be more significant changes in the future. "We need a [wireless industry] partner, that much we know," he said. "Who it is remains to be seen."

Clayton laid out several options. "AT&T (NYSE:T) needs spectrum. Verizon [Wireless] (NYSE:VZ) is in pretty good shape now with its cable spectrum," he said. "T-Mobile and MetroPCS (NYSE:PCS) still need additional spectrum. Sprint, maybe not so. But spectrum's like oil, gold or water--you can't get enough of it. I could see a half-dozen different options that could play out."

The biggest question right now is what Dish will do with its 40 MHz of AWS-4 spectrum, which the FCC said in December could be used for terrestrial mobile broadband. Dish has repeatedly said it wants to partner with a major U.S. carrier and until recently had named Sprint as a potential collaborator. A December Bloomberg report said that the two firms held talks recently on the possibility of Sprint hosting Dish's spectrum on its network.

However, a deal seems to be off the table now that Sprint has finalized plans to acquire Clearwire (NASDAQ:CLWR) for $2.2 billion, which will give Sprint access to Clearwire's 160 MHz of 2.5 GHz spectrum. In late December Dish asked the FCC for more time to file its opposition to Softbank's deal to acquire 70 percent of Sprint for $20.1 billion in light of the Clearwire transaction. Dish signaled that it is concerned about a foreign company owning so much U.S. spectrum and that the deal might give Sprint too much spectrum.

Meanwhile, questions about Dish's next move with its own spectrum continue to swirl. The FCC said Dish Network must cover at least 40 percent of the population in areas covered by its spectrum with a wireless network in the next four years, or face penalties. Further, the FCC said Dish must cover at least 70 percent of that population within seven years. Dish has said it plans to build an LTE Advanced network with its spectrum.

Some analysts have speculated that Dish may decide the buildout will be too costly and will instead sell its spectrum licenses to another carrier, perhaps AT&T. There are no restrictions on Dish selling its spectrum, though the transaction would require FCC approval.

Clayton seemed to scoff at the notion that Dish is just in the wireless game to sell its spectrum and turn a profit. "Don't tell [Dish Chairman] Charlie [Ergen] that," he said. "And I didn't come out of retirement to say grace over a declining paid-TV business and to just cut costs and make things as efficient as possible. I came for the ride, the growth and the excitement."

"We're going to change the way America communicates and entertains itself," Clayton added. "And it won't just be about wireless. It's about satellite broadband for rural America, too. We want to give the consumer whatever he wants, wherever he's at, and we'll use whatever technology's appropriate to do that. It's simplistic, but it's a big idea."

For more:
- see this Denver Business Journal article
- see this Reuters article

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