Dish Network--somehow, some way, some day--will avoid a "zero" valuation of its spectrum assets. We just do not know what will occur, with whom, or when.
Back when regulatory and antitrust authorities blocked the merger of Sprint and T-Mobile US in 2014, some of us speculated that, ironically, that deal could happen, albeit not until one or both carriers had become more damaged than they had been when the deal was proposed.
Developments since 2014, though, suggest other alternatives would be received more favorably, such as a change of ownership that has Sprint assets going to another entity (Comcast, Charter Communications, Suddenlink or a name-brand app or device supplier), not T-Mobile US.
Policymakers and antitrust authorities would not be able to easily justify any combination of T-Mobile US and Sprint assets, when other financially-viable bidders have both the strategic need for such assets, the ability to finance a deal and the willingness to consider such a move.
Some, such as analyst Mark Lowenstein, might suggest such a merger, with Dish Network assets thrown in, as well, is feasible.
Some of us might suggest the market hasn’t yet worsened enough, for Sprint, to make regulators change their minds about reducing the number of leading U.S. mobile providers from four to three. Also, T-Mobile US arguably has gotten stronger since the Sprint merger bid was dropped.
Dish Network, and possibly LightSquared, also figure into the picture. Dish Network has licenses for 50 MHz of downlink and 20 MHz of uplink spectrum to support a mobile network.
Whether Dish would do better delaying any deals regarding its spectrum until after the 600-MHz spectrum auction is unclear, but some might argue its options would be better if a clear decision about deploying those assets is made before the auction process begins, since nobody bidding in the auction would be able to move until after the auction.
On the other hand, Dish Network management obviously believes the 600-MHz auction would only boost the valuation of its spectrum, as arguably was the case for the 700-MHz auctions.
Even though nearly 100 percent of Dish Network revenue comes from its linear video business, the Dish spectrum holdings are valued at $35 billion to 50 billion, representing some 80 percent of the company’s current valuation.
Of course, failure to deploy that spectrum on a timely basis reduces its value to zero. Something will happen, but what, and when, remain unclear.