) has become one of the most attractive telecommunications
companies in the world, having earned a
$20.1 billion bid
from Japan-based SoftBank last fall. Now the company has another
suitor: DISH Network (NASDAQ:
The satellite TV giant surprised the world Monday morning when
it announced that it is willing to pay
"The DISH proposal clearly presents Sprint shareholders with a
superior alternative to the pending SoftBank proposal," Charlie
Ergen, Chairman of DISH Network, said in a company release.
"Sprint shareholders will benefit from a higher price with more
cash while also creating the opportunity to participate more
meaningfully in a combined DISH/Sprint with a
significantly-enhanced strategic position and substantial
synergies that are not attainable through the pending SoftBank
DISH has been interested in entering the wireless carrier
market for more than a year. The company had planned to build
its own service
to compete against the likes of Verizon (NYSE:
) and AT&T (NYSE:
), but those plans were reportedly
put on hold
when the FCC denied Dish's request for a waiver. At the time,
DISH believed that the waiver would have helped the company
"build a new, national high-speed wireless network."
By acquiring Sprint, DISH could enter the cellular service
market right away. It would automatically gain access to millions
of Android and iOS customers, and could use its satellite TV
service to promote the launch of new handsets.
This is not the first acquisition that DISH has proposed, but
it could be the biggest. Two years ago, DISH
acquired Blockbuster Video
in an attempt to bolster its streaming video library.
The company also took control of many of the remaining
Blockbuster Video outlets, many of which have been closed. An
will be shut down this year, resulting in the loss of 3,000
It seems unlikely that a similar fate could befall Sprint.
While the deal is not set in stone (Sprint could go with SoftBank
instead or choose to remain public), DISH seems to be more
interested in the cellular service market now than it is
The Wall Street Journal
, Deutsche Telekom, T-Mobile USA and MetroPCS (NYSE:
) have been speculated as potential targets for DISH's strategy.
DISH ultimately chose to make an offer for Sprint, however.
"We felt like we needed to act now," Thomas Cullen, Dish's
executive VP for corporate development, told The Wall Street
Louis Bedigian is the Senior Tech Analyst and Features Writer
of Benzinga. You can reach him at 248-636-1322 or
firstname.lastname@example.org. Follow him
(c) 2013 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.
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