DISH Network Corp.
) objective to set up its own terrestrial wireless network seems
a distant possibility as it has recently annulled its plan to
acquire bankrupt wireless broadband company, LightSquared Inc.
DISH is the second largest satellite TV operator in the U.S.
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In May 2013, DISH offered $2.22 billion to acquire 40 MHz of
wireless spectrum held by LightSquared. However, Harbinger
Capital Partners, the principal owner of LightSquared, rejected
this bid stating that DISH had resorted to fraudulent means to
enter the bidding process. As a result has decided to invest
nearly $4 billion in LightSquared for further restructuring of
In Oct 2013, a Manhattan bankruptcy judge approved DISH's bid and
had set an auction date on Nov 25, 2013. Earlier, the Federal
Communications Commission (FCC) had refused the use of this
particular airwave as it was interfering with the global
positioning system. This had led to LightSquared's bankruptcy.
Later on, the FCC conducted more tests on the spectrum and
eventually permitted an auction with a few modifications.
DISH Network has been holding 40 MHz of unused satellite spectrum
for the last two years in its portfolio along with the FCC
backing. We believe that the company's attempt to enter the
wireless market is a diversification strategy to counter stiff
competition arising from low-cost video streaming companies like
) and Hulu.
However, to set up wireless network without any wireless partner
will be an extremely difficult task as it requires huge
investment and marketing support. Moreover, 40 MHz of spectrum is
not enough to cover the entire footprint.
Earlier, DISH Network also failed to acquire both
) and its subsidiary Clearwire. Such deal failures will not only
delay the company's wireless deployment goals but will also
result in subscriber loss going forward.
Currently, DISH Network carries a Zacks Rank #3 (Hold).