Dish recently contacted Deutsche Telekom and expressed their interest on the acquisition of T-Mobile. The deal may be realized once the auction for wireless airwaves in November is completed.
Dish is the second largest satellite-TV provider in the U.S. Its co-founder, Charlie Ergen, also controls the company. At this point, the company hasn't made a formal offer yet on its acquisition plans. Currently, the company is focused on the November spectrum auction.
Spearheaded by the Federal Communications Commission, the auction seeks bidders for AWS-3 spectrum. Carriers such as Dish Network can use the spectrum to gain more network capacity and to enhance their customer's music and online video streaming. The auction is speculated to be the largest following the 2008 sale which earned bids that totaled over $19 billion.
The network's acquisition of T-Mobile would earn them a national wireless network that would allow them to deliver mobile video. The move is part of the company's plan to challenge conventional cable TV by allowing their programs to stream effortlessly to a variety of devices. Moreover, it will enable Deutsche Telekom to realize their long-standing request to exit the U.S. market. Lastly, it will provide T-Mobile with a partner that is domestically based which would help them strengthen their competitive stand against the U.S.' two largest carriers, Verizon and AT&T.
Earlier in August, Sprint decided to discontinue pursuing T-Mobile despite lobbying on the idea for several months. Masayoshi Son, chairman of both SoftBank Corp and Sprint, said that his company hasn't totally given up on their acquisition plans. The possibility to renew their interest can be seen in a matter of 18 to 24 months.
Iliad, a French provider of telecommunication services also placed their bid to acquire T-Mobile. Deutsche Telekom rejected Iliad's bid of $33 per share and said that it would be willing to negotiate if the bid was set at $35 to $40 per share.
T-Mobile recently gained 1.4 percent to $30.67 at the stock's closing in New York. Dish earned 0.9 percent to $66.44.
Ergen did not want to start a bidding war and decided to remain on the sidelines as he look for the perfect timing to enter into a deal. When the proposed Sprint and T-Mobile merger was dropped, Ergen saw it as an increased opportunity for Dish to become a contending option. He refuses to speak more about the subject and uttered the word "maybe" as a laconic reply when he was asked if Dish is interested to acquire T-Mobile. He also lauded Sprint and believes that the company has a better network and the potential to expand.
