Dish Network May Set Sights on T-Mobile as Next Acquisition Target
NEWS ANALYSIS: Dish Network might be preparing to test Deutsche Telekom's resolve to keep its majority stake in T-Mobile for the promised 18 months.Late in the final week of June 2013, the long-running soap opera of the Sprint-SoftBank merger was finally over. Dish Networks finally caved and withdrew from its attempt to buy Clearwire out from under Sprint in a June 26 announcement. This Dish disclosure followed a previous move terminating Dish's attempt to buy Sprint itself. In the wake of these Dish announcements, there are indications that the Federal Communication Commission is about to approve the transfer of the Clearwire spectrum to Sprint in its entirety. That transfer will be the final part of the Sprint-Clearwire merger, and likely will happen shortly before Spring and SoftBank merge. Now that Dish has left the picture, there doesn't seem to be anything standing in the way of closing that deal. But that leaves Dish without a wireless company, something that Dish Chairman Charlie Ergen has said is a corporate priority. Could it be that Ergen has already started eyeing T-Mobile? Chances are pretty good that Ergen cast his eyes on T-Mobile as soon as Sprint spurned Dish's offer. In fact, Ergen approached Deutsche Telekom about buying T-Mobile in April, but was sent packing. Now that the T-Mobile merger with MetroPCS is in place, it's possible that DT might be interested again. According to Bloomberg News, Deutsche Telekom is saying that it can sell its share in T-Mobile US to a third party if it sells the whole thing. But wait—wasn't there an 18-month share lockup in place to keep just this sort of thing from happening? That was what DT promised MetroPCS when it was negotiating the merger, after all.
But as is sometimes the case when gazillionaires are involved, promises can be flexible. If there's enough money at stake, the interpretation of what DT promised can change. DT CFO Timotheus Hoettges was quoted in the Bloomberg story as saying that such a sale could take place. So will DT decide to sell if asked by Dish's Ergen?