It seems the potential $26 billion merger agreement between T-Mobile and Sprint has cooled a little. The Wall Street Journal says that the pair are expected to extend the window for an agreement beyond July 29th.
Both parties are said to remain optimistic, but one problem remains Charlie Ergen’s Dish Network and how – and whether – DISH should be the buyer of some key assets, notably Sprint’s Boost Mobile.
Also under discussion is how much of DISH’s traffic could be permitted over the merged business as Ergen migrates his impressive portfolio of cellular spectrum into – potentially – the nation’s 4th wireless carrier.
There’s considerable pressure on Ergen because many of those spectrum licences are based on a “use or lose” rule and timetables are running out.
Cellular analyst Tim Farrar (TMF Associates) in his recent blog, bluntly asked: “What no-one seems to be able to explain is why, despite all these issues, DISH would therefore be pursuing a deal to acquire these assets. Does everyone believe that Charlie Ergen is stupid? Or that he’s desperate, and it’s all just a bluff with a weak poker hand?”
Farrar reminded everyone that – back in 2015-16 – Ergen had a deal in place with T-Mobile to carry his planned cellular network. Farrar also reminded that Dish tried to buy some of Sprint’s 2.5 GHz spectrum back in 2013. In other words Dish is no stranger to the cellular world.
“Even so,” stated Farrar, “if all DISH secured was some assets from T-Mobile and Sprint, then critics are correct to observe that it is almost inconceivable that DISH alone could become a meaningful fourth competitor in the mobile market. Unless DISH has a major partner lined up behind the scenes, then it is setting out on a doomed path, and as I noted, Ergen knows this and is not stupid. He’s said previously on multiple occasions that a full-scale wireless buildout would cost $10 billion and that he wouldn’t do that without a partner. Indeed, he’s hinted at partnership interest from ‘unexpected places’ in recent months.”
Farrar also repeated his advice not to forget the role that Amazon could play in the mix.