Dish Tries to Buy Sprint

Dish Network is offering to pay $4.76 in cash and about $2.24 in Dish stock,  for every share of Sprint, in a bid to scuttle the Softbank purchase of Sprint. 

The Dish bid is not entirely unexpected, as Dish had been raising lots of cash and had made earlier efforts to combine, in some way, with Clearwire, for example. The $25.5 billion offer would not immediately affect market share in the U.S. mobile industry, and neither would a Softbank purchase. 

The one combination long rumored that could make an immediate difference is a combination between T-Mobile USA and Sprint. As improbable as a three-way deal might be, all three companies have been talking with the others in recent days. 

And many observers have argued, for some time, that eventually T-Mobile USA and Sprint would have to combine, to provide the critical mass to compete against AT&T and Verizon Wireless.



For Dish, the move would make the company a national provider of voice, video entertainment and Internet access service. 

Whatever the eventual outcome, either Softbank or Dish Network would carry a rather significant debt load. 

Among other issues, the Dish Network bid illustrates a belief on the part of Charlie Ergen, Dish Network CEO, that the video entertainment business, at least from where Dish sits in the market, is being a problem. 

Ergen is among those in the video subscription business who have relatively more publicly suggested the future lies with online video and mobile video. 

Observers will differ on which bid is better, long term, for consumers in the U.S. mobile market. Softbank is a known market disrupter. Dish Network would likely reshape Sprint in the direction of a lower-cost provider, over time. 

The other angle is that the combined companies, with Dish Network's spectrum as well as Clearwire's and Sprin't holdings, would immediately emerge as the U.S. service provider with the most spectrum. 

For reasons of where those frequencies lie, Sprint arguably would be in position to leverage the spectrum assets in ways others would find challenging (think video). 

On the other hand, Verizon Wireless and AT&T might have an advantage, in terms of signal propagation, in many rural areas. 

But none of the deals are done yet. And no matter what happens, either a Softbank or Dish Network or some other deal, T-Mobile USA will still be facing a tough challenge competing with the other three national providers. 

The issue now is whether we have seen the last of the offers, and whether other firms might decide to make a play for either Sprint or T-Mobile USA. When assets are in play, the outcomes rarely are completely predictable.