Dish Eyes T-Mobile Takeover, And That Could Be A Very Good Thing For Wireless Competition

from the bigger-sometimes-is-better dept

Fri, Jun 5th 2015 4:25am — Karl Bode

Ever since regulators blocked AT&T's acquisition of T-Mobile, T-Mobile has responded by lighting a fire under the wireless industry. With an amusing CEO and consumer-friendly policies, the company is currently adding more new subscribers per quarter than any of the other big four carriers, once again shockingly highlighting how not treating your customers like the enemy can pay notable dividends. But no matter how well T-Mobile has been doing, German owner Deutsche Telekom has made it repeatedly clear that it wants out of the U.S. market.

However, getting a sale done has proven harder than the company expected. After the AT&T deal was blocked by regulators, they also indicated they wouldn't approve a sale to Sprint, in order to keep four large, viable competitors in the market. Rumored for a while, indications now are that satellite TV provider Dish Network is in talks to acquire T-Mobile in a deal worth more than thirty billion:

"The two sides are in close agreement about what the combined company would look like, with Dish Chief Executive Charlie Ergen becoming the company’s chairman and his T-Mobile counterpart, John Legere, serving as the combined company’s CEO, the people said. Tougher questions about a purchase price and the mix of cash and stock that would be used to pay for a deal remain unresolved, the people said. One of the people characterized the talks as at “the formative stage,” and said an agreement might not ultimately be hammered out."

The deal would join a wave of consolidation in the telecom sector, including Frontier's acquisition of Verizon's California, Texas, and Florida fixed-line assets, Verizon's acquisition of AOL, Charter's acquisition of Time Warner Cable and Bright House Networks, and AT&T's acquisition of DirecTV. And while Dish is rumored to be a horrible place to work and boss Charlie Ergen has a reputation for being a pain in the ass to work with, the deal makes quite a bit of sense and should probably have no problems getting past regulators.

Whereas T-Mobile has been a thorn in the side of AT&T and Verizon, Dish has been similarly disruptive on the TV front, whether that's via its ad-skipping Hopper DVR, or the launch of its new Sling TV Internet video service. Dish has also been slowly accumulating a ton of spectrum over the last few years, insisting it was pondering a solo or joint wireless play. And while combined it's believed that the new T-Mobile under Dish would have even more spectrum than AT&T or Verizon, it wouldn't be enough to trip the FCC's "spectrum screen" used to determine competitive harm:

$DISH/$TMUS would fit under @FCC spectrum screen and have more spectrum than $T and $VZ http://t.co/cRH87kaWMg pic.twitter.com/vEv3r1Fqxb
— Walt Piecyk (@WaltBTIG) June 4, 2015

There had been some worry that Dish was just acquiring spectrum in order to sit on it, flipping it down the road for additional cash to AT&T and Verizon. Instead, a Dish buy could result in an even stronger T-Mobile with the spectrum and resources to shore up the one area where it still lags behind AT&T and Verizon: total network coverage. Telecom writers everywhere also win under this deal, as entertaining f-bomb dropping T-Mobile CEO John Legere is expected to remain at the helm of the new, tougher company. Should Sprint finally be able to get things together under new owner SoftBank, we might actually start seeing something vaguely resembling real, sustained price competition in the wireless sector.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: competition, mergers, spectrum, wireless
Companies: at&t, comcast, directv, dish, t-mobile, verizon

12 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

avideogameplayer, 5 Jun 2015 @ 5:15am

All I see is a potential me too merger that'll turn T-Mobile into another Verizon...

Bundling packages, throttled data caps, etc...

So this isn't a good thing...
[ link to this | view in chronology ]
- Haywood (profile), 5 Jun 2015 @ 5:42am
  
  Re:
  I'd agree on those concerns, let's just hope it does turn out to be the same old T-Mobile, but with better infrastructure.
  I personally would not have a cell without them. It simply isn't important enough to justify a monthly bill.
  I bought a 1000 minute Prepaid sim and recharge it yearly. Granted my plan wouldn't last a 17 year old a month, but is suits my needs perfectly.
  Not certain what I'd do if that option went away.
  [ link to this | view in chronology ]
  - nasch (profile), 5 Jun 2015 @ 12:11pm
    
    Re: Re:
    Not certain what I'd do if that option went away.
    
    There are other ways than T-Mobile to get a yearly prepaid cell plan.
    [ link to this | view in chronology ]
Richard O, 5 Jun 2015 @ 6:25am

Capital
Even if this goes through, it will still take a lot of money to capitalize on it. I'm not sure where Sprint sits on that chart, but they do have quite a bit of spectrum. Yet they still have years of work and investment to fill out their network.
[ link to this | view in chronology ]
- Andrew D. Todd, 5 Jun 2015 @ 7:40am
  
  Can You Use Existing Capital? (to Richard O, #3)
  Well, I don't know, Dish has a lot of "rooftop presence." The messy part of an installation is often things like attaching a mounting bracket to the building, snaking a cable through the wall, stuff like that. It might be comparatively simple to bolt on a new box, and switch the cables over. That said, maybe they could push the limits on mesh wireless. Dish/T-Mobile would be totally motivated to do so, because they haven't got any landlines.
  [ link to this | view in chronology ]
  - Richard O, 5 Jun 2015 @ 8:09am
    
    Re: Can You Use Existing Capital? (to Richard O, #3)
    You have two main links in the communication path; cell to tower (Point of Presence) and tower to network (backhaul). Using rooftops as PoPs might provide sufficient coverage in high density areas. Somewhat like Comcast is trying to do with their Xfinity WiFi from their cable modems. (And the same issues too.) However backhaul would be non-existent. All satellite providers do now for backhaul is to leverage an existing broadband connection. There's no way that would fly as a cell tower.
    [ link to this | view in chronology ]
    - Andrew D. Todd, 5 Jun 2015 @ 8:52am
      
      Re: Re: Can You Use Existing Capital? (to Richard O, #3)
      Well, I was thinking in terms of getting the backhaul from equipment expressly designed for that purpose, specifically a phased-array antennae at twenty gigahertz, effectively a microwave relay with automatic lock-on. My calculations indicate that such an equipment could support a competitive environment with something like ten competing providers.
      
      Of course, my perspective is a mountaineer's perspective. If I take my binoculars outside on the stairwell or to the doorstep, I can literally see for the better part of a mile in some directions. The highest part of the steeply pitched roof (*) is maybe another twenty or thirty feet further up, with a correspondingly greater view. My ISP is about several hundred feet away, and fifty feet down, even though it is four miles away via telephone connection. If I could communicate where I can see, I would be a very happy man.
      
      (*) Designed for heavy snow load.
      [ link to this | view in chronology ]
uce dewata, 5 Jun 2015 @ 7:58am

I'd agree on those concerns, let's just hope it does turn out to be the same old T-Mobile, but with better infrastructure.
I personally would not have a cell without them. It simply isn't important enough to justify a monthly bill.
I bought a 1000 minute Prepaid sim and recharge it yearly. Granted my plan wouldn't last a 17 year old a month, but is suits my needs perfectly.
[ link to this | view in chronology ]
Pronounce (profile), 5 Jun 2015 @ 12:07pm

Seems Like A Good Deal Now....
But eventually I think that T-Mobile customers are going to suffer. Deutsche Telekom wanted out bad enough to dump huge resources into making T-Mobile attractive to buyers. But once the deal is done the profitability mentality will set in, and T-Mobile customers (I'm one) are going to get the same crappy service as Dish customers do now.

My hope had been for a new player into the media market, a disrupter, cable cutter company to pick up T-Mobile, but seems like we getting the sucky Dish company. Sad, sad day for me.
[ link to this | view in chronology ]
Pronounce (profile), 5 Jun 2015 @ 12:07pm

Seems Like A Good Deal Now....
But eventually I think that T-Mobile customers are going to suffer. Deutsche Telekom wanted out bad enough to dump huge resources into making T-Mobile attractive to buyers. But once the deal is done the profitability mentality will set in, and T-Mobile customers (I'm one) are going to get the same crappy service as Dish customers do now.

My hope had been for a new player into the media market, a disrupter, cable cutter company to pick up T-Mobile, but seems like we getting the sucky Dish company. Sad, sad day for me.
[ link to this | view in chronology ]
Anonymous Coward, 8 Jun 2015 @ 3:45am

I can't imagine why Telekom wants to get rid of T-Mobile. They are facing some more competition here in germany from cable companies offering 100MBps service to their customers while otherwise broadband is offered by DSL(16MBps getting more common) with VDSL slowly rolling out
[ link to this | view in chronology ]
- Anonymous Coward, 8 Jun 2015 @ 7:14am
  
  Re:
  IANAL but among other things, it's because of dumb american laws.
  Anyway it'll be pointless if the TPP goes through as we'll all be forced to conduct business under US trade law.
  [ link to this | view in chronology ]