T-Mobile and Dish Network Discussing a Possible Merger

By Todd R. Weiss  |  Posted 2015-06-04 Print this article Print
T-Mobile, Dish Network, merger

T-Mobile CEO John Legere would serve as the CEO of the combined company, while Dish CEO Charlie Ergen would become the chairman, according to a report.

T-Mobile US, the fourth-largest U.S. mobile phone carrier, is reportedly talking with Dish Network about a merger that could finally bring T-Mobile together with another business after similar merger talks with Sprint were ditched in August 2014.

The merger talks between T-Mobile and Dish were reported June 4 in The Wall Street Journal, based on interviews with anonymous sources close to the talks.

"The two sides are in close agreement about what the combined company would look like," including the idea of appointing T-Mobile CEO John Legere as the combined company's CEO while making Dish CEO Charlie Ergen the combined company's chairman, the news story reported.

A price tag and other possible details of such a merger are not yet available since the talks are ongoing. "One of the [sources] characterized the talks as at 'the formative stage,' and said an agreement might not ultimately be hammered out," the paper reported.

Such a merger possibility follows the announcement in late May that Charter Communications is acquiring Time Warner Cable, the second-largest U.S. cable company. Under the deal, Charter valued Time Warner Cable at $78.7 billion and will pay $195.71 per share for the stock, a premium from the $171.18 closing price for the shares on May 22.

The Charter-Time Warner deal came just a month after an earlier $45 billion TWC acquisition proposal by Comcast fell apart due to potential roadblocks from federal regulators who were leery of the merger due to concerns about unfair competition and harm to industry innovation. The Time Warner-Comcast merger had been proposed back in February 2014, according to earlier eWEEK reports. TWC was also in the merger cross hairs of Luxembourg-based cable and telecom company Altice, which didn't act before Charter made its move.

Dish had about 13.8 million satellite television subscribers as of March 31 and reported $3.7 billion in revenue and $351 million in net income for first quarter of 2015, according to the company.

T-Mobile reported a 13.1 percent year-over-year revenue increase to $7.78 billion for the first quarter of 2015, but a net loss of $63 million.

T-Mobile has 56.8 million customers as of early May, which places the carrier in fourth place behind Verizon, AT&T and Sprint.  

Spokespeople for T-Mobile and Dish Network did not respond to an emailed inquiry from eWEEK seeking comment on the rumors of a potential merger between the two companies.

T-Mobile and Sprint have been fighting for market share for a long time, with the rivalry increasing in recent months as T-Mobile's Legere often boasted about how his company had or would soon surpass Sprint to take over the No. 3 spot. Legere made such comments during a recent earnings call and at a press event in New York in March. That happened briefly, but only because T-Mobile had announced his financial results about a week before Sprint did.

In August 2014, Sprint dropped its plans to buy T-Mobile after the move was opposed by regulators, according to reports at the time. Sprint had been rumored for months to be seeking a merger with T-Mobile so that the two struggling companies could join together and fight harder to compete with mobile powers Verizon Wireless and AT&T. Neither company ever commented publicly on those rumors until Sprint finally said in August that it was giving up its plans.

Following the aborted merger attempt, Sprint then shook up its executive ranks by replacing its CEO, Dan Hesse, with Marcelo Claure, founder and CEO of Brightstar, a subsidiary of Softbank.



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