Sprint Faces No Easy Task Choosing Between Suitors Dish, Softbank
Dish, on the other hand, isn't a wireless company. While it's done well competing in the satellite television business, Dish has no experience in the world of wireless carriers, so regardless of its money, Dish will have to keep Sprint's management happy enough to hang around and run the company. But there is that other thing called spectrum. Softbank has no wireless spectrum in the U.S. and will depend on what Sprint and Clearwire already own to grow Sprint's presence in the U.S. But Dish comes with the one thing that all wireless companies salivate over more than anything else—unused spectrum. Dish bought up a ton of spectrum when it was trying to create a wireless entertainment network, and it has bought up more since then. In other words, Dish has the one thing that Sprint desires most—the spectrum to really expand its network, especially its Long Term Evolution (LTE) network. When combined, the Sprint, Clearwire and Dish spectrum assets would be vast. It would be a game-changer for Sprint. But while that seemingly endless supply of spectrum is good for Sprint's future, it's an asset that Sprint can't take advantage of immediately. Even if Dish succeeds in wooing Sprint away from Softbank, it would take years for the combined companies to put that spectrum to work. To start expanding Sprint's network with the spectrum, Dish would need to put a plan together, get the Federal Communications Commission approvals for its planned usage and finally to build out the infrastructure—all of which is time-consuming. Meanwhile, Softbank's money is here now. There will be less debt accompanying it. Sprint will still exist in some form because 30 percent of it will remain in investors' hands. To those investors, Softbank's proposal will look like a deal with a lot less risk. But the return over the long run will be diminished.You'd think that Sprint would see the obvious synergies of hopping into Dish's limo, and dancing into the future together. But choosing Softbank means more immediate gratification. You might say that the Softbank limo is not only more stretched, but it's also a Mercedes. In the long run, Sprint would fare better with Dish. But I suspect the investors and the special committee are more interested in Softbank's instant gratification.
Now it's almost time to go to the prom. Which "promposal" will Sprint's special committee think is the sweetest? Will it be the exotic foreigner or the rich guy with better long-term prospects?