Dish Network has some spectrum – more than 50MHz of choice wireless spectrum to be more precise, and they just don’t know what to do with it. They tried to do battle with Softbank for Sprint about a year ago and lost out. Then there continues to be speculation about whether they will to go after T-Mobile or collaborate somehow with Sprint. However, New Street Research analyst Jonathan Chaplin thinks it might be in Dish’s best interest to sell its spectrum to either Verizon Wireless or AT&T and just keep its satellite TV business.
It could make perfect sense – AT&T is trying to buy Dish rival DirecTV and Verizon CEO Lowell McAdam has made it clear they do not want to own a satellite business, but he did hint that Dish “has some interesting assets.” Dish controls more than 50MHz of spectrum that include 40MHz of AWS-4 band and 10MHz of the 1900MHz PCS H Block – part of which is adjacent to the AWS-4. Dish Chairman Charlie Ergen compared their spectrum equivalent to the largest untapped oil reserve in the wireless industry. Chaplin sees it as a win-win for Dish and the buyer of their spectrum – the buyer would have to pay Dish at least $28 billion, but then could spin off the satellite business and avoid a massive tax bill. Both Verizon and AT&T are starving for spectrum and need more than what they will be able to purchase in the AWS-3 auction and next year’s 600MHz auction. Chaplin wrote:
“Verizon and AT&T currently have 38 % and 34% of industry revenues but just 16% and 20% of industry spectrum, respectively. Assuming spectrum is fully utilized over time, a carrier’s traffic share should match their spectrum share, and revenue share should match traffic share. Both companies should be able to increase spectrum share modestly over the next two auctions; however, they won’t come close to closing the gap. Dish’s spectrum would help tremendously–it is the largest source of capacity available today and would take Verizon and AT&T to 31% and 45% spectrum share, respectively (post auction).” It will be interesting to see what happens to Dish and their highly prized spectrum – what is disturbing is the fact that both Verizon and AT&T need so much more spectrum…it is as though they never planned this out…and how is their need for spectrum affecting our wireless service with them. Hopefully, this will all be resolved by the end out the year.