Dish Could Use Spectrum for Mobile Video, Broadband
Satellite TV Provider Takes Hit on Wall Street from Auction Speculation
By Linda Moss -- Multichannel News, 12/4/2007 9:57:00 AM
EchoStar Communications could use spectrum acquired in the upcoming 700 MHz auction to develop a mobile video and broadband service, a Wall Street analyst said Tuesday.
In a report, Oppenheimer & Co. analyst Thomas Eagan once against voiced his belief that AT&T will acquire EchoStar, parent of Dish Network.
The satellite provider’s stock took a hit Tuesday morning “on concern that EchoStar will bid in the upcoming 700 MHz auction, thwarting its chances of being acquired by AT&T,” Eagan wrote. “We do believe this is an over-reaction.”
EchoStar shares closed the day at $40.31, down $2.05, almost 5%.
Eagan said he believes it is it is unlikely EchoStar will make a major bid in the auction, while it is likely AT&T will.
“However, even if both Dish and AT&T bid for spectrum, it could be that Dish and AT&T would bid for different blocks … of spectrum in order to provide different services,” Eagan wrote. “With its recent purchase of Sling Media, Dish could use the spectrum to develop a mobile video [and broadband] service, which might not conflict with AT&T.”
He added, “If both Dish and AT&T do bid, it is likely that an imminent AT&T take-out of Dish is remote. There are rules [to avoid collusion] prohibiting bidders from being in contact with each other during the bidding process.”
Finally, Eagan pointed out that Dec. 11 is AT&T'’s Investor Day, when the telco could announce that it has picked Dish Network as its exclusive triple-play partner.
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