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 Dish Network Corp, which lost out to Japanese telecoms giant
Softbank in its attempt to buy Sprint Corp <S.N> several months ago,
has since been sizing up T-Mobile US Inc as a takeover candidate and
has talked to majority owner Deutsche Telekom AG <DTEGn.DE> about a
potential deal, the three sources said.
Dish's Chairman Charlie Ergen is looking to expand the company he
founded beyond the mature pay TV market and also wants to put to
work the billions of dollars in wireless spectrum he's amassed in
the past few years.
Sprint is also mulling a takeover of T-Mobile and could make a bid
in the first half of 2014, according to a report in The Wall Street
Journal last week.
While Dish has not yet decided whether to move forward with a bid,
the company does not intend to sit on the sidelines if Sprint does
bid for T-Mobile, two of the people said.
All the people asked not to be named because they were not
authorized to speak with the media.
Dish, T-Mobile and Deutsche Telekom declined comment.
Any bidding war for T-Mobile would play out in a much more subtle,
less public way than the bidding frenzy earlier this year for
Sprint, as majority owner Deutsche Telekom can determine who it
wants to sell the No.4 wireless operator to.
Shares of T-Mobile rose 2.1 percent to close at $27.25 on Wednesday.
Dish edged up 0.5 percent to $55.29.
PATH AHEAD A combination of Dish and T-Mobile would have an easier
path to antitrust approval because it would keep four large wireless
operators in the United States: Verizon Wireless <VZ.N> <VOD.L>,
AT&T Inc <T.N>, Sprint and T-Mobile.
However, Dish would have less synergies with T-Mobile than Sprint,
because it owns wireless spectrum but does not have a network or
infrastructure. Dish has a market value of $25 billion while
T-Mobile has a market value of $21 billion.
A merged Sprint and T-Mobile would be still smaller than market
leaders Verizon and AT&T, but could run up against the government's
previous stated stance that it wants to see four wireless players in
the country.
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When the U.S. government blocked No. 2 wireless operator AT&T's
proposed takeover of T-Mobile in 2011, antitrust regulators said
that the market needed four national competitors.
The German operator, which owns 67 percent of T-Mobile, has been
sounding out options to lessen the impact of the U.S. wireless
business on its balance sheet for many years and even quietly
discussed buying Sprint in 2008.
T-Mobile US was still struggling to compete at the time of its
attempted merger with AT&T. But this year, the company has regained
some ground with some unusual and competitive offers that appear to
be winning over consumers and forcing bigger rivals to follow in its
footsteps.
Dish's chairman Charlie Ergen has said that he wants to keep his
options open as the company expands in the wireless space. Dish has
been trying to acquire more spectrum in both bankruptcy and
government auctions and has also said it is open to forging
partnerships with other companies such as Sprint.
Ergen, who founded Dish 33 years ago, has said he would look for
ways to use wireless spectrum to enhance its video offerings rather
than in areas such as voice, data and texting services where telecom
companies have dominance.
(Reporting by Liana B. Baker, Soyoung
Kim, Nicola Leske and Sinead Carew in New York and Harro Ten Wolde
in Frankfurt; editing by Phil Berlowitz and Andrew Hay)
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