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Dish eyes T-Mobile if AT&T bid fails

Dish Network Corp is considering a partnership with T-Mobile USA if AT&T is unable to fulfill its bid to take over the fourth U.S. wireless network, Dish Chief Executive Joe Clayton said on Monday.
/ Source: Reuters

Dish Network Corp is considering a partnership with T-Mobile USA if AT&T is unable to fulfill its bid to take over the fourth U.S. wireless network, Dish Chief Executive Joe Clayton said on Monday.

Clayton told Reuters that Dish is serious about its ambitions to get into the wireless space, but said the company first needs to be awarded a wireless license by the U.S. Federal Communications Commission. It would then have to wait for a final decision by the U.S. government on the merger between AT&T and T-Mobile USA before deciding its next move.

"The FCC and the government, if the merger goes through, is going to dictate and demand a new carrier so there's a minimum of four (carriers) and we believe we are going to be one of those and that's what our plan is," he said in an interview at Dish's sales office in New York.

Dish has spent nearly $3 billion on wireless spectrum and assets in the last year as it seeks to diversify its business beyond satellite pay-television.

Clayton said Dish would still need a wireless partner to take care of the voice services, which requires wireless infrastructure to be built.

The Judge overseeing the antitrust case regarding the merger on Monday granted a request by both AT&T and the government for a postponement of the proceeding until January 18 while AT&T evaluates all its options, another blow to an already troubled deal.

After two disappointing quarters when it lost hundreds of thousands of subscribers, Dish Network's business is poised for a turnaround, Clayton told Reuters on Monday.

"I think you'll see good fourth quarter results from us and they will clearly show we've turned the corner," he said.

He declined to comment further on the company's subscriber numbers for the current quarter.

Led by its chairman, billionaire Charlie Ergen, who hired Clayton to be CEO in May, Dish has bought video store chain Blockbuster and companies with wireless spectrum such as DBSD and TerreStar in recent months.

Ergen has previously said that Dish's future is not in the Pay TV business. Clayton said Dish will keep expanding but not abandon its roots in pay TV.

"We think we are well positioned with the Blockbuster acquisition, plus the wireless spectrum we have, which is almost as much as Sprint and T-Mobile has. The building blocks are already in place to evolve."

He said Dish could become a major wireless carrier once it finds a partner, or acquires a wireless company.

As well T-Mobile USA, Clayton said Dish would be willing to consider working with any other wireless partner including Clearwire, Sprint, LightSquared, MetroPCS and Leap.


Clayton said the company's future also depends on the Pay TV business generating cash for possible wireless expansion.

"Pay TV is going to generate tons of cash, $1.5 billion, cash this year to help us fund the future," he said.

Dish has lost market share in recent quarters to DirecTV, which has lured its subscribers with its NFL Sunday Ticket football package.

Dish, along with cable competitors including Cablevision Systems Corp and Time Warner Cable, have been blaming the weak economy for stunting housing growth and hurting businesses. If people are not moving into new homes, they will not sign up for new TV services.

While its stock is up about 30 percent this year, Clayton said it will continue to rise. Once the stock rises, the company will be better position to make more acquisitions, he added.

"When I get Dish (to) the right size and focused in the right manner, our stock price will appreciate, then I'll use that as a currency to help in the acquisition in new assets as well."

Clayton hinted that the deep subscriber losses the company has seen in past quarters may be over. Dish lost 111,000 subscribers last quarter and 135,000 subscribers in the third quarter.

"Yes we lost subscribers in the second quarter. It was less than the third quarter. We are happy with our trends. Things are moving our way," he said.

In September, Dish unveiled a video streaming service for its Blockbuster brand, a move to better compete with movie rental giant Netflix and rival cable and satellite TV providers.