Wednesday, June 17, 2015

Comcast in Talks to Buy T-Mobile US?

Deutsche Telekom reportedly is in talks with Comcast about a possible purchase of T-Mobile US , a move that could vault Comcast immediately into the top ranks of U.S. mobile service providers, while imperiling Dish Network’s valuation, and its ability to monetize its significant mobile spectrum assets.

As with all such reports, there are many reasons for such information to leak. DT might actually hope it can sell for a higher price to Comcast. At the very least, having other serious bidders provides negotiating leverage.

But part of the attraction also could be Comcast’s willingness to assume full control, buying all outstanding shares of T-Mobile US. That would allow DT a full and immediate exit from the U.S. market.

There always could be regulatory issues. Dish Network might have an easier time gaining antitrust approval.

And, as always, the parties might not be able to agree on fundamental terms. Still, Comcast is a strategic buyer; T-Mobile US a strategic seller. And some have suggested a Dish Network purchase of T-Mobile US would eliminate some other eventual buyers of that whole asset, namely Comcast.

One must assume it is impossible for any of the four largest U.S. mobile firms to acquire or merge with each other, based on past regulatory decisions and views. That leaves only other third parties.

Should Dish Network decide not to bid for T-Mobile US, or should any such bid be rejected by Deutsche Telekom, Dish Network likely would have to consider a major network sourcing deal with Sprint, something the Sprint network now is specifically crafted to support.

That would still leave Dish Network requiring additional assistance on the marketing and operating fronts, however, Having a network is one thing. Creataing an effective national sales and fulfillment presence is quite another challenge.

Dish already has tried, unsuccessfully, to buy Sprint and Clearwire, nor is SoftBank likely to want to sell, so a Dish acquisition of Sprint is unlikely.

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