Dish Network Has Better Prospects Than Sprint to Buy T-Mobile

NEWS ANALYSIS: Satellite network provider Dish might have a reasonable chance of acquiring a wireless network while also keeping Sprint from buying T-Mobile.

The future of T-Mobile has been up in the air for a few years now. First AT&T tried to buy the company in early 2011 only to have its bid blocked by the U.S. Department of Justice and the Federal Communications Commission.

Then, earlier this month, rumors started circulating that Sprint was gearing up to buy T-Mobile, the nation's fourth-largest wireless carrier. Now the rumor emerges again, this time fueled by stories in Reuters and Investor's Business Daily that Dish Network is thinking of buying T-Mobile.

I mentioned the possibility that Dish would set its sights on buying T-Mobile in July 2013 and now may be approaching reality. The reasons are fairly straightforward. Dish Network and its chairman, Charlie Ergen, have made no secret of the fact that the company wants a wireless carrier and it's got plenty of spectrum to bring to the party. Dish has already tried tenaciously to buy Sprint, but failed. T-Mobile is the only U.S. company left that Dish can buy to turn itself into a wireless carrier.

Dish has some significant advantages over Sprint. First, Sprint's chances of getting regulatory approval to buy T-Mobile are slim. Both the DoJ and the FCC have made it clear they don't look favorably on reducing the number of national wireless carriers from four to three.

But even if the companies were to get approval, there's the immense cost of merging two companies with different wireless technologies. T-Mobile is already going through this, but it's doing it with MetroPCS, a much smaller regional carrier.

So what would a T-Mobile-Dish merger look like? Right now, Dish doesn't have a wireless phone network, but it does have plenty of unused spectrum, part of which is in the highly desirable 700 MHz band and part of which is in the L and S band originally designated for satellite phones. But in early December, Dish received permission from the FCC to repurpose those bands for cellphone use as long as those uses didn't interfere with other services, notably GPS.

While the microwave frequencies used by satellite phones aren't as useful for mobile phone use as is the 700 megahertz band, it's still useful spectrum. Perhaps equally important, T-Mobile already operates in nearby radio bands. This means that if Dish were to buy T-Mobile, the company could gain the use of significant resources that it already owns.

What this boils down to is T-Mobile would gain spectrum it needs, and Dish would gain the wireless carrier it wants.

Wayne Rash

Wayne Rash

Wayne Rash is a freelance writer and editor with a 35 year history covering technology. He’s a frequent speaker on business, technology issues and enterprise computing. He covers Washington and...