Dish Network might yet cut in on the merger dance between Sprint and T-Mobile US, though analysts say it's more likely the satellite TV broadcaster could play bridesmaid in the wireless marriage.
Sprint (NYSE:S), controlled by Japan-based SoftBank, is widely expected to bid for T-Mobile US (NYSE:TMUS) this summer. Shares of T-Mobile, which is 67% owned by Deutsche Telekom (OTCPK:DTEGY), slipped after reports surfaced that Sprint will offer $40 per share, half in cash and half in stock. Some T-Mobile shareholders expected a higher price, analysts say. A merger with Sprint faces a tough regulator review and litigation looms if the deal is blocked. A court battle could drag on well into 2016.
Sprint and T-Mobile, the Nos. 3 and 4 U.S. wireless service providers, are expected to argue that without a merger, they'll be unable to compete effectively against much bigger Verizon Wireless (NYSE:VZ) and AT&T (NYSE:T). Regulators, though, have signaled they want a wireless market with four national players, not three.
News is determined by its content: analysts can help bring to light facts based information and analysis. However, much of the current 'news' is speculation or stuff that is already known within the industry... call it 'yesterday's news' or just speculation. The recent news has been that T-Mobile parent company Deutsche Telekom has agreed to a basic set of terms for a yet to be formalized agreement to sell T-Mobile to Sprint-Softbank. Neither side has said if or when a formal deal will be made and neither side can say it will be approved.
The basic financial structure of the deal has been reported to be a 50:50 split between equity and cash. Much beyond that is speculation until further details come out, which probably won't be until after a deal is agreed to.. at which time filings with the SEC will be made available and the companies will likely put forward their proposal in public presentations and meetings with the financial and regulatory communities.
Having reached basic terms between S-SB and DT/T-Mobile does move the ball further down the road and helps clarify what might happen between other players if the deal moves forward or not.
One thing this does is it raises the price for acquisition of TMUS to a level that its probably out of the question for Ergen/DISH to consider. Unless T-Mobile heads downhill, Ergen will find it highly unlikely to pay a similar price to DT in either cash or stock. That tightens DISH's options for making deals that will allow it to compete as a nationwide media+mobile broadband company.
What if regulators do not give approval for the deal? That should make it more likely that S-SB will seek to combine efforts with DISH through acquisition or partnering of shared spectrum and network access.
In the not too distant future, Sprint, DISH and T-Mobile might have each acquired valuable 600 MHz incentive auction spectrum which allows them to compete, in about four years, on a more equal footing against the BORG Empire