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DISH Network Exploring Rural U.S.

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DISH Network Corp. (DISH) is looking for several options to utilize its sizeable storage of wireless spectrums. Recently, the company has executed a Letter of Intent with regional wireless network operator, NTELOS Holdings Corp. (NTLS).

The two companies will deploy a fixed-mobile broadband network to offer high-speed Internet service to those areas which NTELOS is currently serving. These include Virginia, West Virginia and portions of Maryland, North Carolina, Pennsylvania, Ohio and Kentucky.

Most of these customers are located in the rural communities where wireless and high-speed broadband is unavailable. According to the Federal Communications Commission, nearly a fifth of these American households lack broadband access.  DISH and NTELOS will install a reliable high-speed Internet service, which their customers can access either from home or outside. NTELOS will provide wireless towers and other hardwires and DISH will provide the most valuable wireless spectrum licenses to this joint venture.

DISH is primarily targeting the wireless spectrum of those firms which went bankrupt. In 2012, the company purchased 2 slots of the 40 MHz S-band wireless spectrum from TerreStar Networks Inc. and DBSD North America Inc. for a consideration of $2.9 billion. A recent Bloomberg report stated that the company has made an offer of $2 billion to purchase the wireless frequencies of the bankrupt wireless wholesale service provider LightSquared Inc.

DISH is currently pursuing two takeovers. In Jan 2013, DISH offered to purchase the remaining 49% stake of 4G WiMAX wholesalers Clearwire Corp. (CLWR) for $3.30 per share. In Dec 2012, Sprint Nextel Corp. (S), the 51% shareholder of Clearwire proposed a $2.97 per share bid to acquire the remaining 49% of Clearwire.

In Apr 2013, in a major strategic move, DISH made a counter bid of $25.5 million to acquire Sprint Nextel. Softbank of Japan had earlier made a $20.1 billion bid for Sprint Nextel. DISH network is trying hard to either acquire or collaborate with an established wireless operator to build a nationwide viable wireless network. DISH Network currently has a Zacks Rank #3 (Hold).

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