Report: Dish whisks TerreStar away from MetroPCS

Dish Network is poised to acquire bankrupt TerreStar Networks' operations and spectrum for around $1.38 billion, according to a Reuters report citing unnamed sources familiar with the matter. If true, the transaction would give Dish--fronted by billionaire Charles Ergen--access to the satellite spectrum of both TerreStar and DBSD North America.

According to Reuters, MetroPCS (NASDAQ:PCS)--previously rumored to be interested in TerreStar--did not make a move for the satellite company. Further, MetroPCS was not alone in its apparent indifference to TerreStar's assets; Reuters reported no other entities made bids for TerreStar, which left Dish with the winning, "stalking horse" bid of $1.38 billion.

Representatives from Dish and TerreStar declined to comment to Reuters.

"The TerreStar spectrum can be combined with 20 MHz of adjacent spectrum that Dish is purchasing in the DBSD bankruptcy to put together a 20×20 block of spectrum," wrote BTIG analyst Walter Piecyk. "We believe this has an immediate $750 million ($1.65 per share) positive impact of the value of the combined spectrum that Dish now owns."

Piecyk said Verizon Wireless (NYSE:VZ), MetroPCS or other wireless players could now look to partner with Dish for access to its spectrum.

Piecyk also pointed out that Dish now has a stronger spectrum position than LightSquared, which has been forced to rework its LTE deployment plans in order to address possible interference with GPS signals.

"Given LightSquared's interference issues and Ergen's bankruptcy wins, Ergen seems to be in a superior spectrum position to LightSquared," Piecyk wrote. "It does not appear that LightSquared is in a position to deliver a 20×20 LTE for many years, if ever. It's also possible that LightSquared's initial deployment will be limited to a 5×5 MHz LTE depending on how quickly Inmarsat can deliver clean spectrum."

For more:
- see this Reuters article
- see this BTIG post (reg. req.)

Related Articles:
Dish Network lands $1.38B bid for TerreStar, reportedly outflanking MetroPCS
Judge approves Dish Network's bid for TerreStar assets
Bankrupt TerreStar extends deadline for bids on assets
LightSquared's GPS interference plan leaves more questions than answers

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