Bloomberg: Dish and T-Mobile merger talks stalled

Bloomberg: Dish and T-Mobile merger talks stalled
For a while, word on the street was that T-Mobile and Dish were going to get hitched, offering each something the other needed. It was not a done deal though, T-Mobile’s parent company Deutsche Telekom may want out of the US market, but it is not giving up its magenta colored diamond in the rough away for free.

Dish on the other hand, holds a ton of as-yet unused spectrum. However, it has been burning through cash to acquire that spectrum, and it is a certainty it does not have the cash lying around to pony-up whatever premium T-Mobile would be worth in an acquisition.

That seems to be one of the bones of contention, valuation of T-Mobile. With the 600MHz incentive auction looming early next year, it would behoove DT and Dish would to work out those details were it not for another sticking point, structure of the merged company.

Thanks to T-Mobile’s new vigor in the US, and the upcoming presidential election next year, DT is taking the cautious approach with any deal. In Dish’s case, DT is concerned about the value of stock it would acquire in a sell-off, and spectrum holdings are not monetized appropriately. The political climate may also set the stage for other interested companies, like Comcast or possibly Luxembourg-based conglomerate Altice SA, who has been shoring up its telecom holdings in Europe, and recently acquired US-based Suddenlink Communications.

Another variable could be Dish’s CEO Charles Ergen, who has a reputation for starting talks about such deals but then never making them happen. He has also not been able to close the deals he appeared to want to close, like buying Sprint or Clearwire. That could be some of the structural concerns, can he work with a dynamic figure like John Legere?

source: Bloomberg

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8 Comments

1. cncrim

Posts: 1588; Member since: Aug 15, 2011

Sound good. I would like to see merger happen.

2. cncrim

Posts: 1588; Member since: Aug 15, 2011

******Sound not great. I would like to see......

3. abhinav.tella

Posts: 14; Member since: Jul 18, 2015

Glad it stalled. Dish is nearly the same size as T-Mobile and if they did finance the purchase they would spend most of their revenue on debt servicing rather than proper growth. This is why Sprint went with Softbank instead of Dish because Softbank actually offered a real investment for future growth. Comcast is probably a better option for T-Mobile. As for spectrum there is always the upcoming 600Mhz auction.

4. Doakie

Posts: 2478; Member since: May 06, 2009

Well getting behind Soft bank didn't really matter much...Sprints network still sucks. I have a Sprint phone as a backup to my AT&T line and Sprint still has giant areas of no LTE.

5. abhinav.tella

Posts: 14; Member since: Jul 18, 2015

Agree that's why I switched to T-Mobile. In my area Sprint 3G is like other carriers 2G but slower and LTE is like 3G. The Softbank effect will take time, you can't expect changes this fast as the merger was fairly recent.

7. Henryg129

Posts: 1; Member since: Jul 18, 2015

That's funny coming from a guy with an AT&T line that needs a backup....

6. mike2959

Posts: 696; Member since: Oct 08, 2011

Just another example of the big 4 influencing the FCC. Blocking anyone that wants to play in their sandbox.

8. Eclectech

Posts: 355; Member since: May 01, 2013

Culturally, I don't think the two companies would mesh well so perhaps they should not merge. Further, I don't believe Dish is managed very well so this could be Sprint and Nextel, version 2.0

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