DISH Network Corp.
) announced that the company will participate in the upcoming
low-frequency wireless spectrum auction to be conducted by the U.S.
Federal Communications Commission (FCC). The auction is expected to
take place in mid-2015. This sale will offer airwaves voluntarily
freed up by several TV stations in the U.S. The money that will be
raised from this auction will be given to the TV station
On the other hand, lowband spectrum winners will get hold of the
much coveted frequencies to expansion or deployment of a new mobile
broadband network. The auction will also help the U.S. government
to solve the country's spectrum crunch to some extent.
The U.S. government is striving to provide more airwaves to
support the growing demand for smatphones, tablets and other mobile
handheld devices. DISH has further decided to take part in the
smaller AWS-3 spectrum auction to be conducted by the FCC on Nov.
DISH, the second largest satellite TV operator in the U.S., has
built an extensive wireless/satellite spectrum base over the last
seven years. The company's current spectrum holding stands at 56
MHzs for which it has invested around $5-$6 billion since 2007.
In 2012, the company purchased 2 slots of the 40 MHz S-band
wireless spectrum from bankrupt TerreStar Networks Inc. and DBSD
North America Inc. In Mar 204, DISH won the bid for PCS H Block
wireless frequencies auctioned by the FCC. Moreover, the company
owns a slot of 700 MHz airwaves.
The triple-play pay-TV, high-speed broadband and telephony
market in the U.S. is currently undergoing massive consolidation.
Two major pay-TV operators, namely,
Time Warner Cable Inc.
) have decided to merge.
) is pursuing the acquisition of DISH's closest competitor,
Both the deals are awaiting regulatory approval. Notably, DISH
has raised objection against both these mergers to FCC as the deals
will be detrimental to the competitiveness of the pay-TV
We believe DISH's attempt to enter the wireless market is a
diversification strategy to counter pay-TV market competition. DISH
enjoys the opportunity to collaborate with established telecom or
tech companies to jointly establish a wireless network or monetize
its spectrum holding for considerable profits.
Importantly, several industry analysts estimated that the
existing wireless spectrum portfolio of DISH will be valued at
around $25-$26 billion. DISH currently carries a Zacks Rank #3
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
DISH NETWORK CP (DISH): Free Stock Analysis
AT&T INC (T): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis
TIME WARNER CAB (TWC): Free Stock Analysis
To read this article on Zacks.com click here.