A recent Bloomberg report stated that satellite-TV operator DISH Network Corp. (DISH) has made an offer of $2 billion to purchase the wireless frequencies of the bankrupt wireless wholesale service provider LightSquared Inc. However, the approval from the Federal Communications Commission (FCC) is a major concern looming over this offer. FCC refused the use of this particular airwave as it was interfering with the global positioning system. This is the reason behind Lightsquared’s bankruptcy.
For DISH, we believe that management is trying hard to develop the company as storage for spectrums that can be used to deploy a viable nationwide mobile network to offer bundled triple-play wireless voice, broadband Internet and pay-TV network. DISH is primarily targeting the wireless spectrum of those firms which went bankrupt. In 2012, the company purchased 2 slots of the 40 MHz S-band wireless spectrum fromTerreStar Networks Inc. and DBSD North America Inc. for a consideration of $2.9 billion.
In a major strategic move, DISH made a counter bid of $25.5 million to acquire Sprint Nextel Corp. (S). Softbank of Japan had earlier made a $20.1 billion bid for Sprint. DISH network is trying hard to either acquire or collaborate with an established wireless operator to challenge telecom giants such as, Verizon Communications Inc. (VZ) and AT&T Inc. (T).
Earlier, DISH had purchased bankrupt movie-rental chain Blockbluster Inc. However, the acquisition failed to provide the required synergies to DISH and is currently considered as one of its worst performing assets. Successful deployment of a nationwide wireless network may enable DISH to install a formidable video-on-demand service over a wireless network of mobile handsets, such as smartphones and tablets. DISH currently has a Zacks Rank #5 (Strong Sell).
DISH NETWORK CP (DISH): Free Stock Analysis Report
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