[Satellite TODAY 04-16-13] Dish Network’s proposed deal for just under $26 billion to acquire Sprint Nextel (Sprint) is potentially a huge transformative deal on the U.S. communications landscape, which has direct implications to the satellite industry. The company is competing with Japanese wireless giant Softbank for a significant piece of Sprint, so the deal is far from straightforward, especially given Dish Networks’ bid was unsolicited.

 

    In October last year, Softbank announced that it had reached an agreement to acquire a 70 percent stake in Sprint which would see the Japanese mobile giant invest $20.1 billion in Sprint, consisting of $12.1 billion to be distributed to Sprint stockholders and $8 billion of new capital to strengthen Sprint’s balance sheet. The deal had been expected to close in the middle of this year and would have given Softbank a blue-chip position in the lucrative U.S. wireless market.

 

    Sprint Nextel has just fewer than 56 million customers in the United States and was one of the first operators to bring 4G services to customers in the United States.

 

    The situation is a tangled one on many levels, given that both Dish Network and Sprint have also been competing to do a deal for Clearwire, a provider of 4G wireless broadband services. Clearwire’s 4G mobile broadband network covers more than 130 million people in the United States.

 

    Given Charlie Ergen, Dish Network’s Chairman’s history of dealmaking, the ambitious nature of this deal should come as little surprise.

 

     “I wasn’t surprised as Dish has been trying desperately to find suitable terrestrial partners for a long time. It wants to acquire a terrestrial operator, as the company wants to go forward with its LTE venture. It had already targeted Clearwire but Sprint will be a win-win deal for both companies,” said Maxime Baudry, a satellite analyst at French consultancy firm, IDATE.

 

    Should the deal go ahead, and Dish acquires Sprint Nextel, it could lead to combinations of communications technology for Dish, with satellite a key part of the overall infrastructure.

 

     “The ICT world is really going to mobility and ubiquity and the deal should allow Dish to establish a nice LTE network through a combination of Sprint’s LTE spectrum with its own spectrum in the 2 GHz band and be in a position to propose new quadruple play offerings. In the future, we might also see interesting things around mobile broadcasting in LTE. It will open Dish’s huge distribution network and DTH subscriber base in order to compete better against AT&T and Verizon Wireless. We should see interesting bundles emerging from the deal,” added Baudry.

 

    Any deal could clearly impact the satellite sector given Dish Network’s position as a major satellite pay-TV provider in the United States.