Roger Fingas
Dish Network is in talks to merge with T-Mobile U.S., a report said on Thursday, and while major details remain unsorted, the companies are believed to be closely aligned about what a resulting entity would look like — one that might pose a threat to Apple's rumored subscription TV service.
Dish CEO Charlie Ergen would become the new company's chairman, while T-Mobile CEO John Legere would retain his rank, sources told The Wall Street Journal. The major obstacles are believed to be financial, namely a purchase price and the percentages of cash and stock that would pay for the deal.
One of the sources described negotiations as being in a "formative stage," however, and said a merger could still fail to materialize.
For Dish the deal would serve several important purposes, above all giving it an alternate source of income in view of its shrinking satellite TV business, which is likely to suffer even more as growing numbers of people turn to the Internet for video. Dish also has billions of dollars in wireless licenses, but lacks a cellular network to make use of them.
Dish's main rival, DirecTV, is in the middle of a $49 billion acquisition by AT&T, which could make T-Mobile a way of remaining competitive, assuming both deals survive scrutiny by regulators.
An attempted Comcast takeover of Time Warner Cable was scrapped when government regulators signaled they were worried about the merged company having too much control of the U.S. media landscape. Similar concerns could be voiced about the AT&T/DirecTV and Dish/T-Mobile deals, as well as Charter's recent bid for TWC.
One Dish property is Sling TV, which began offering a streaming TV service earlier this year for $20 a month. With T-Mobile on board, that could present even greater competition for Apple, which is believed to be working on a TV service of its own.
William Gallagher
Malcolm Owen
Charles Martin
35 Comments
Just one more reason for me to continue thinking about dumping my T-Mobile account. Their coverage sucks.
Just one more reason for me to continue thinking about keeping my T-Mobile account. I have a router and know where to get wi-fi on those rare occasions where their coverage sucks.
All the carriers are trying to snag the pipes leading to consumers. If carriers can charge Apple customers for access to, Netflix, Hulu, Apple TV, etc, AND offer their own similar services, it may make it harder for over the top services to compete on margins.
So why are satellite companies merging with cell phone companies? Are we ultimately going to get rid of the Comcast's of the world by moving to LTE for internet and TV? Not sure that is viable for everyone. I get mediocre cell service where I live, regardless of what carrier.
And this is what happens with these over regulated businesses. To grow they have to merge with some kind of vaguely related entity instead of the more logical competition.