Dish Network chairman Charlie Ergen has reportedly told Deutsche Telekom that he is open to buying its wireless operator T-Mobile US in the coming months.
The DTH provider has said it may be interested in a deal once the country’s AWS-3 spectrum…
Dish Network chairman Charlie Ergen has reportedly told Deutsche Telekom that he is open to buying its wireless operator T-Mobile US in the coming months.
The DTH provider has said it may be interested in a deal once the country’s AWS-3 spectrum auction in November is completed, reported Bloomberg citing people with knowledge of the matter.
Dish is yet to hire advisers and the extent of its interest is unclear, the report said. The satellite operator’s decision to wait until after the AWS-3 auction is motivated by its desire to find out the current market value of its own spectrum.
Speaking on a results call in early August, Ergen said: “The auction is going to tell us kind of where we stand on a baseline value as a company … There’s going to be a reset of values for this mid-band spectrum.”
Ergen anticipates the value of Dish’s spectrum to be higher than the market expects following the auction, and thus is reluctant to do business before then. A higher valuation would give Dish more options to finance any potential deal.
The chairman also spoke of his interest in T-Mobile on the call: “Certainly to the extent that [T-Mobile’s larger telecoms rival] Sprint either dropped out or wasn’t interested or the government wouldn’t allow it … then T-Mobile is something we would have an interest in.”
Ergen has talked openly about T-Mobile in the past and, last year, tried to acquire Sprint as part of plans to deploy a terrestrial network with its satellite spectrum.
Whether Dish gets the chance to buy the operator will also depend on whether rival bidder Iliad can raise its offer to a sufficient level to sate Deutsche Telekom.
At the end of July, the French telco lodged a US$33 per share offer for 56.6% of T-Mobile, which was deemed insufficient by Deutsche Telekom’s board.
Iliad is now reportedly in talks with potential partners, including Dish, which would give it the clout to put in a bid that the German telecoms incumbent would accept.
Iliad, which has a smaller market capitalisation than its target, believes T-Mobile could occupy a similarly disruptive position in the US market to where its Free Mobile brand sits in France.
T-Mobile’s share price rose 1.42% following Bloomberg’s report, Dish went up 0.91%, and Iliad shot up 2.94%.
Dish and Deutsche Telekom were unable to comment on the speculation.
