Dish Network has announced that it has launched plans to purchase Sprint Nextel for $25.5 billion. This bid goes against one that already exists from Japanese wireless carrier Softbank.
This merger would allow Dish to offer bundles that include voice, broadband data and video. “The Dish proposal clearly presents Sprint shareholders with a superior alternative to the pending SoftBank proposal,” says Dish Network Chairman Charlie Ergen.
Dish wants to expand its offerings beyond the satellite TV business. Dish’s business was flat year-over-year in 2012 as the satellite TV business is seen as having limited opportunities as the Internet continues its growth as a provider of entertainment.
“Ergen is a disruptive force in the telecom and TV industry,” says Roger Entner, a telecom analyst at Recon Analytics. “He needs to have a partner in the wireless world to make his investment in his wireless spectrum worthwhile. Dish is desperately looking for a deal.”
Dish already owns some spectrum, which could be combined with what they get from Sprint and a separate deal for Clearwire. “The combined national footprints and scale will allow Dish/Sprint to bring improved broadband services to millions of homes with inferior or no access to competitive broadband services,” Ergen says.
The move by Dish emphasizes the closeness between TV video platforms and mobile devices; wireless carriers are increasingly competitors as they invest heavily in their LTE networks for video streaming. “They’re competing against Verizon and AT&T, and they need to be able to broaden their offerings,” says Phillip Redman, an analyst at Gartner. “A lot of consumers are mobile first in many ways.”
Source: USAToday.com