DISH Network Corp.
) has won a favorable ruling to take part in the upcoming
spectrum auction of LightSquared Inc. In May 2013, DISH offered a
bid of $2.22 billion to acquire 40 MHz of wireless spectrum held
by LightSquared, which is currently bankrupt. However, Harbinger
Capital Partners, the principal owner of LightSquared, objected
to this bid stating that DISH has resorted to fraudulent means to
enter the bidding process.
Last Monday, a Manhattan bankruptcy judge approved DISH's bid and
has set Nov 25, 2013 as the auction date. Earlier, the Federal
Communications Commission (FCC) had refused the use of this
particular airwave as it was interfering with the global
positioning system. This has led to LightSquared's bankruptcy.
Since entering Chapter 11, LightSquared has applied to modify its
license to some of its spectrum for a nationwide LTE network.
This application has been pending at the FCC for over a year.
DISH 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
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. DISH is
the second largest satellite TV operator in the U.S. after
). The U.S. pay-TV market is intensely competitive. Competition
emerge from the fiber-based video offerings of telecom giants,
cable MSOs and online video streaming service providers.
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We believe DISH's attempt to enter into the wireless market is a
diversification strategy to counter pay-TV market saturation. The
company enjoys the opportunity to collaborate with several
established telecom or tech companies to jointly establish a
wireless network. Earlier, DISH failed to acquire
) from Softbank of Japan.
In May 2013, the company executed a Letter of Intent with
regional wireless network operator,
NTELOS Holdings Corp.
) to deploy a fixed-mobile broadband network to offer high-speed
Internet services to areas served by NTELOS. Accordingly, on Jun
17, 2013, the two entities jointly launched broadband service
across rural Virginia by utilizing 2.5 GHz band of airwaves. DISH
currently has a Zacks Rank #5 (Strong Sell).
(We are reissuing this article to correct an inaccuracy. The
original article, issued Thursday, Oct 3, 2013, should no longer
be relied upon.)