Dish Eyes T-Mobile Takeover, And That Could Be A Very Good Thing For Wireless Competition

from the bigger-sometimes-is-better dept

Ever since regulators blocked AT&T’s acquisition of T-Mobile, T-Mobile has responded by lighting a fire under the wireless industry. With an amusing CEO and consumer-friendly policies, the company is currently adding more new subscribers per quarter than any of the other big four carriers, once again shockingly highlighting how not treating your customers like the enemy can pay notable dividends. But no matter how well T-Mobile has been doing, German owner Deutsche Telekom has made it repeatedly clear that it wants out of the U.S. market.

However, getting a sale done has proven harder than the company expected. After the AT&T deal was blocked by regulators, they also indicated they wouldn’t approve a sale to Sprint, in order to keep four large, viable competitors in the market. Rumored for a while, indications now are that satellite TV provider Dish Network is in talks to acquire T-Mobile in a deal worth more than thirty billion:

“The two sides are in close agreement about what the combined company would look like, with Dish Chief Executive Charlie Ergen becoming the company?s chairman and his T-Mobile counterpart, John Legere, serving as the combined company?s CEO, the people said. Tougher questions about a purchase price and the mix of cash and stock that would be used to pay for a deal remain unresolved, the people said. One of the people characterized the talks as at ?the formative stage,? and said an agreement might not ultimately be hammered out.”

The deal would join a wave of consolidation in the telecom sector, including Frontier’s acquisition of Verizon’s California, Texas, and Florida fixed-line assets, Verizon’s acquisition of AOL, Charter’s acquisition of Time Warner Cable and Bright House Networks, and AT&T’s acquisition of DirecTV. And while Dish is rumored to be a horrible place to work and boss Charlie Ergen has a reputation for being a pain in the ass to work with, the deal makes quite a bit of sense and should probably have no problems getting past regulators.

Whereas T-Mobile has been a thorn in the side of AT&T and Verizon, Dish has been similarly disruptive on the TV front, whether that’s via its ad-skipping Hopper DVR, or the launch of its new Sling TV Internet video service. Dish has also been slowly accumulating a ton of spectrum over the last few years, insisting it was pondering a solo or joint wireless play. And while combined it’s believed that the new T-Mobile under Dish would have even more spectrum than AT&T or Verizon, it wouldn’t be enough to trip the FCC’s “spectrum screen” used to determine competitive harm:

There had been some worry that Dish was just acquiring spectrum in order to sit on it, flipping it down the road for additional cash to AT&T and Verizon. Instead, a Dish buy could result in an even stronger T-Mobile with the spectrum and resources to shore up the one area where it still lags behind AT&T and Verizon: total network coverage. Telecom writers everywhere also win under this deal, as entertaining f-bomb dropping T-Mobile CEO John Legere is expected to remain at the helm of the new, tougher company. Should Sprint finally be able to get things together under new owner SoftBank, we might actually start seeing something vaguely resembling real, sustained price competition in the wireless sector.

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Companies: at&t, comcast, directv, dish, t-mobile, verizon

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Comments on “Dish Eyes T-Mobile Takeover, And That Could Be A Very Good Thing For Wireless Competition”

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Haywood (profile) says:

Re: Re:

I’d agree on those concerns, let’s just hope it does turn out to be the same old T-Mobile, but with better infrastructure.
I personally would not have a cell without them. It simply isn’t important enough to justify a monthly bill.
I bought a 1000 minute Prepaid sim and recharge it yearly. Granted my plan wouldn’t last a 17 year old a month, but is suits my needs perfectly.
Not certain what I’d do if that option went away.

Andrew D. Todd (user link) says:

Re: Can You Use Existing Capital? (to Richard O, #3)

Well, I don’t know, Dish has a lot of “rooftop presence.” The messy part of an installation is often things like attaching a mounting bracket to the building, snaking a cable through the wall, stuff like that. It might be comparatively simple to bolt on a new box, and switch the cables over. That said, maybe they could push the limits on mesh wireless. Dish/T-Mobile would be totally motivated to do so, because they haven’t got any landlines.

Richard O says:

Re: Re: Can You Use Existing Capital? (to Richard O, #3)

You have two main links in the communication path; cell to tower (Point of Presence) and tower to network (backhaul). Using rooftops as PoPs might provide sufficient coverage in high density areas. Somewhat like Comcast is trying to do with their Xfinity WiFi from their cable modems. (And the same issues too.) However backhaul would be non-existent. All satellite providers do now for backhaul is to leverage an existing broadband connection. There’s no way that would fly as a cell tower.

Andrew D. Todd (user link) says:

Re: Re: Re: Can You Use Existing Capital? (to Richard O, #3)

Well, I was thinking in terms of getting the backhaul from equipment expressly designed for that purpose, specifically a phased-array antennae at twenty gigahertz, effectively a microwave relay with automatic lock-on. My calculations indicate that such an equipment could support a competitive environment with something like ten competing providers.

Of course, my perspective is a mountaineer’s perspective. If I take my binoculars outside on the stairwell or to the doorstep, I can literally see for the better part of a mile in some directions. The highest part of the steeply pitched roof () is maybe another twenty or thirty feet further up, with a correspondingly greater view. My ISP is about several hundred feet away, and fifty feet down, even though it is four miles away via telephone connection. If I could communicate where I can see, I would be a very happy man.

() Designed for heavy snow load.

uce dewata (profile) says:

I’d agree on those concerns, let’s just hope it does turn out to be the same old T-Mobile, but with better infrastructure.
I personally would not have a cell without them. It simply isn’t important enough to justify a monthly bill.
I bought a 1000 minute Prepaid sim and recharge it yearly. Granted my plan wouldn’t last a 17 year old a month, but is suits my needs perfectly.

Pronounce (profile) says:

Seems Like A Good Deal Now....

But eventually I think that T-Mobile customers are going to suffer. Deutsche Telekom wanted out bad enough to dump huge resources into making T-Mobile attractive to buyers. But once the deal is done the profitability mentality will set in, and T-Mobile customers (I’m one) are going to get the same crappy service as Dish customers do now.

My hope had been for a new player into the media market, a disrupter, cable cutter company to pick up T-Mobile, but seems like we getting the sucky Dish company. Sad, sad day for me.

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