[Satellite News 12-20-11] Dish Network stocks soared nearly 10 percent today following the Dec. 19 announcement that AT&T was withdrawing its $39 billion bid to acquire T-Mobile from Deutsche Telekom. Analysts said the pay-TV satellite broadcaster, who actively criticized the potential merge between the two international cellular service providers, holds a powerful hand of assets that is attracting investors.

   AT&T’s hand to terminate the deal with Deutsche Telekom was forced by strong opposition from the U.S. Justice Department and the U.S. Federal Communications Commission (FCC). The agencies alleged that the acquisition would cripple competition in the wireless telecom sector and could drive up prices for consumers and competitors.

   TMF Associates Analyst Tim Farrar said the satellite broadcaster’s $12 billion market capitalization puts it in a prime position for a potential buy-out. “Relative to the T-Mobile deal, AT&T will have a much easier path for approval if it were to buy Dish,” Farrar said in a statement. “Dish Network doesn’t have an operating wireless network, so there are none of the same concerns about competition.”

   The move seems to make sense from a logistics standpoint. Dish Network maintains a $3 billion portion of U.S. broadband spectrum thanks to recent acquisitions from its sister company Echostar. AT&T happens to be in short supply of that very same spectrum, due to increasing demand from its customers for video and music downloads to portable devices.

   AT&T’s competitor Verizon Wireless also has been busy acquiring the leftover spectrum. Earlier this month, Verizon purchased $4 billion in spectrum from a consortium of cable companies. AT&T would have been forced to hand over $1 billion in spectrum to T-Mobile had the acquisition been completed. In a statement issued in early December, AT&T CEO Randall Stephenson warned that Congress and the FCC probably wouldn’t agree on terms for a spectrum auction until at least 2016.

   In an effort to launch a line of handsets in 2014, Dish Network filed for FCC approval to operate a combination satellite-and-terrestrial fourth-generation wireless network using the spectrum it obtained. Farrar said the approval would drive up the value of Dish’s spectrum considerably. “Dish also holds spectrum that complements a block of airwaves AT&T is buying from Qualcomm for about $2 billion. It’s a natural for AT&T to consider taking a look at that,” he said. “Dish has also confirmed it is open to partnering with T-Mobile or other wireless entities, including Sprint Nextel, to build a stronger competitor to Verizon and AT&T.”

   During a Dec. 8 speech at the UBS Global Media and Communications Conference., Verizon CEO Lowell McAdam announced plans to end his company’s wireless LTE partnership with pay-TV operator DirecTV and stop its build-out of FiOS television and Internet services during the next two years.

   McAdam said Verizon Wireless would seek new partnerships with cable giants to cross-market phone, video, Internet and cellular services.

   “We have begun discussions with officials at the FCC about its $3.6 billion deal to buy spectrum from Comcast, Bright House and Time Warner Cable. The spectrum they will buy isn’t being used and fits well with the commission’s strategy to use airwaves that are being warehoused by firms,” McAdam said during the speech. “This takes spectrum that had no plans to be put into commercial service … We will make that commercial in the near-term.”

   While Deutsche Telekom will hold on to its T-Mobile unit for the time being, the company has been busy with its joint venture with France Telecom. In September, Deutsche Telekom launched its satellite TV offering Entertain Sat and reached 50,000 subscribers by the end of the month. With such strong early take-up, the company now considers Entertain Sat a key part of its video strategy in Germany, Telekom Deutschland Spokesman Christian Illek told Satellite News.

   “Starting in September, Entertain has been available via satellite and therefore to more than 75 percent of all households in Germany. With our satellite package, we want to reach new customer groups and enable even more people to experience our great TV service. Our potential customers are the 16 million households throughout the country that rely on satellite television,” Illek said.