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Mon April 15, 2013
Dish Satellite Network Tries To Upend Sprint Deal
Originally published on Mon April 15, 2013 9:02 pm
ROBERT SIEGEL, HOST:
The satellite TV provider Dish Network made an aggressive bid today to move into wireless telecom. The company offered $25.5 billion to buy Sprint Nextel, the nation's third largest wireless carrier.
As NPR's Yuki Noguchi reports, the problem for Dish is that Sprint has already agreed to sell most of itself to a Japanese telecom company called SoftBank.
YUKI NOGUCHI, BYLINE: Charles Ergen sold satellites from his car in 1980. Now, Dish Network is the third largest video provider in the U.S.
CHARLES ERGEN: We've been a disrupter; we've been a builder.
NOGUCHI: Now, Ergen wants to disrupt things a little more. By expanding his Dish empire to include Sprint, he says it will marry video with the ability to deliver faster wireless access. Speaking on a conference call today, Ergen touted the complementary fit between the businesses and their wireless assets.
ERGEN: I would love to be a Dish-Sprint subscriber and pay one bill; and know I got my video everywhere, and know I got my voice everywhere, and know I got my broadband everywhere.
NOGUCHI: But in order to achieve that, Dish must unseat the rival offer made last year by another deep-pocketed, ambitious entrepreneur. Sprint's current buyer, SoftBank, is a Japanese wireless provider run by Masayoshi Son. Son, like Ergen, built his company from nothing, and needs Sprint for a foothold in the U.S. In touting his offer, Ergen called his deal more strategic than SoftBank's $20 billion deal, and more lucrative for Sprint shareholders.
Derek Turner is a research director for Free Press, a public advocacy group. Turner says he doesn't think either deal will benefit consumers. And he worries about a combination of Sprint and Dish.
DEREK TURNER: Anytime I see players that are at the bottom of their own, respective markets trying to get together, it tells me that there's a problem.
NOGUCHI: With market share of about 15 percent in each of their industries, Turner says the combined company still wouldn't have the market power necessary to challenge the dominant players in cable and telecom.
TURNER: It's essentially delaying the inevitable because companies like Verizon and AT&T have substantial advantages everywhere else along the market that the combined Dish and Sprint wouldn't have.
NOGUCHI: Chetan Sharma is an independent analyst who has worked for Sprint in the past. He says Charles Ergen is no stranger to proposing deals in order to gain leverage; and he suspects that what Dish is really after isn't ownership of Sprint, but an opportunity to strong-arm the company into a partnership deal. Sharma says both SoftBank and Sprint are eager to close their deal, and that Ergen may have been nervous about missing an opportunity.
CHETAN SHARMA: He's a tough negotiator, in terms of if he wants to get a deal done, he - you know, he'll try to do whatever is in his power to make that happen.
NOGUCHI: Sprint says its board of directors will review Dish Network's offer. Yuki Noguchi, NPR News, Washington.
(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright NPR.