) suffered a setback as Standard & Poor's Rating Services
(S&P) lowered its outlook on the company to Stable from
Positive. The rating agency cited growing leverage of DISH
coupled with uncertainty related to its wireless venture, as the
primary reasons for this outlook downgrade. However, the S&P
reiterated its existing corporate credit rating of DISH at "BB-",
which is three notches into the rating agency's junk
Although DISH received the FCC approval to deploy a nationwide
wireless network, it came with a restrictive condition. The FCC
stated that DISH may start installing its nationwide wireless
network using a truncated power level than what the company was
initially holding. A reduction in DISH's frequency level is
required to avoid interference with an adjacent PCS H Block
frequency that FCC will auction in 2013.
DISH's plan for the wireless spectrum is not yet clear.
Management said it may try to collaborate with several
established telecom or tech companies to jointly establish a
wireless network or it may even sell its airwaves for simple
monetary gain. Recently, DISH decided to raise $1 billion of debt
for general corporate purposes, which may include wireless and
spectrum-related strategic transactions.
In Jan 2013, DISH offered to purchase the remaining 49% stake
of 4G WiMAX wholesalers
) for $3.30 per share. In Dec 2012,
Sprint Nextel Corp.
), the 51% shareholder of Clearwire, proposed a $2.97 per share
bid to acquire the remaining 49% of Clearwire. DISH's proposal
has a total consideration of $5.15 billion and includes several
DISH is the second largest satellite TV operator in the U.S.
). The pay-TV market is quickly becoming saturated and is highly
competitive. In order to diversify its business model, DISH has
decided to enter into the wireless market. Currently, DISH has a
Zacks Rank #3 (Hold).
CLEARWIRE CORP (CLWR): Free Stock Analysis
DISH NETWORK CP (DISH): Free Stock Analysis
DIRECTV (DTV): Free Stock Analysis Report
SPRINT NEXTEL (S): Free Stock Analysis Report
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