DISH Network Corp.
) is one of the 34 possible contenders to bid for the upcoming
auction of PCS H Block wireless frequencies by the Federal
Communications Commission (FCC). Notably, DISH is the only major
company to file for applications. The remaining 33 companies are
small regional telecom operators such as
NTELOS Holdings Corp.
), CSpire, Piedmont Rural and James Valley Cooperative
The bidders need to file their complete application form and
upfront payment by Dec 18, and the auction will be conducted on
Jan 22, 2014. This is the first auction for wireless spectrum in
the U.S. after 2008.
DISH, the second largest satellite TV operator in the U.S.,
has constructed an extensive wireless/satellite spectrum base
over the last couple of years. In 2012, the company purchased 2
slots of the 40 MHz S-band wireless spectrum from the bankrupt
TerreStar Networks Inc. and DBSD North America Inc. for a
consideration of $2.9 billion. Moreover, the company owns a slot
of 700 MHz airwaves.
Although DISH Network received the FCC approval to deploy a
nationwide wireless network, it came with a restrictive
condition. The FCC said that DISH can start installing its
nationwide wireless network using only a truncated power level.
The FCC claimed that a reduction in DISH's frequency level is
required to avoid interference with an adjacent PCS H Block
frequency which the regulatory body will now auction.
DISH already submitted a bid for $1.56 billion for the H Block
spectrum and it seems that other smaller bidders may not be able
to match to that amount. If finally DISH wins H Block frequency,
it will significantly raise the company's power and emission
levels to establish a profitable venture in the wireless
Furthermore, DISH also offered a bid of $2.22 billion to
acquire 40 MHz of wireless spectrum held by LightSqured, which is
currently bankrupt. This auction will take place later this
We believe DISH's attempt to enter into the wireless market is
a diversification strategy to counter pay-TV market saturation.
DISH Network enjoys the opportunity to collaborate with several
established telecom or tech companies to jointly establish a
wireless network. Management estimates that its portfolio of
wireless spectrums can be monetized for $10 billion.
However, management is yet to take a final decision on its
wireless venture. Earlier this year, DISH failed its attempt to
). Current rumors in the industry suggest a possible merger
between the two largest satellite TV operators, namely, DISH and
). Currently, DISH has a Zacks Rank #3 (Hold).
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
NTELOS HOLDINGS (NTLS): Free Stock Analysis
SPRINT CORP (S): Free Stock Analysis Report
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