Monday, October 13, 2014

Illiad Ends Bid to Buy T-Mobile US

In the continuing saga of “who will buy T-Mobile US,” France’s ended its long-shot effort to buy T-Mobile US from Deutsche Telekom, apparently after Deutsche Telekom board members “refused to entertain its new offer.”

That clears the way for an expected bid by Dish Network sometime in early 2015, many predict. The reason for the expected delay is that spectrum auctions to be held in late 2014 might put a higher value on Dish Network spectrum holdings, allowing Dish Network to benefit from a higher equity value when and if it makes a bid to buy T-Mobile US.
Buying T-Mobile would allow Dish to offer entertainment video, high-speed Internet and mobile  voice service across the country nationwide.

Dish Network’s strategy is in one way the mirror image of what AT&T is attempting with its purchase of DirecTV.

Where Dish Network is a satellite video provider trying to create a national triple play, AT&T will try to add a national video entertainment offer to its national mobile network, creating a similar triple play.
T-Mobile US serves approximately 47 million subscribers, generating revenues of over $24 billion with a current market value of close to $25 billion.

But the real prize is the means for Dish Network to fulfill conditions of its spectrum licenses, which require building of an actual transmission network, without which Dish Network loses its licenses, and the equity value the licenses represent.

Should Dish Network make such a successful bid, and should AT&T’s bid to buy DirecTV be approved, we also would see the end of the U.S. satellite entertainment business as an independent segment of the U.S. consumer services business.

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