Analyst: Dish Could Gain in T-Mobile-Sprint Hookup

Barclays says concessions could lead to MVNO deals, spectrum buys

Reports that T-Mobile and Sprint are moving forward in merger talks could have a benefit for one of Sprint’s past suitors, Dish Network, according to Barclays media analyst Kannan Venkateshwar.

According to CNBC, T-Mobile and Sprint are apparently moving forward in merger talks, with both sides agreeing that T-Mobile parent Deutsche Telekom would emerge from a deal as the combined company’s largest shareholder. In addition, T-Mobile CEO John Legere would be expected to head the combined company, although Masayoshi Son, CEO of Sprint parent Softbank, would have a say in how it is run.

Dish had attempted to purchase Sprint in 2013, but was bested by an offer from Softbank.

According to CNBC, the T-Mobile talks have forced Sprint to put its efforts to purchase Charter Communications on hold. Charter has repeatedly said it is not interested in a deal,  but that didn’t stop Sprint from trying to line up funds for an offer.

Dish, sitting on a swath of wireless spectrum that it doesn’t necessarily want to build out itself – in the past it has said it would need a partner but has since softened that position – could  benefit from any possible concessions that would likely be part of any federal government approval of a T-Mobile/Sprint deal, Venkateshwar wrote in a note to clients. He added that in allowing the third and fourth largest wireless carriers to merge, the feds could require that to address competitive concerns, the combined company may have to offer Mobile Virtual Network Operator (MVNO) agreements to other providers, or to sell off some if its spectrum. Either way, Dish could benefit.

“With Dish now owning critical component pieces of spectrum required to run a network, an ability to leverage the combined network of Sprint-T-Mobile could offer Dish the ability to enter the wireless business without having to invest in infrastructure,” Venkateshwar wrote. “This arrangement in a way would be similar to LightSquared’s arrangement with Sprint when the former was still a going concern. Dish could then essentially launch its own service or lease this network on a wholesale basis to any third party that wants to enter wireless.”

Dish shares were up about 2% ($1.09 each) to $54.47 per share in early trading Wednesday.