Dish Network and T-Mobile Talking Merger (Report)
Dish CEO Charlie Ergen would become the combined company's chairman with T-Mobile chief John Legere serving as CEO.
Dish Network Corp. is in merger talks with T-Mobile US Inc., the Wall Street Journal reported on Wednesday.
The report, citing sources familiar with the deal, says the two sides are edging toward an agreement on what the combined company's management will look like. Sources say Dish chief Charlie Ergen would become the combined entity's chairman and T-Mobile CEO John Legere would become chief executive of the new company.
If the merger happens, the new Dish-T-Mobile entity would be the second-largest satellite TV company and the fourth-largest wireless carrier in the U.S. The deal would also solve many problems each company faces. Dish lacks a broadband business and also a cellular network for the billions of dollars worth of wireless licenses it owns. Those very same licenses would give T-Mobile, 66 percent owned by Germany's Deustche Telekom, the capacity to expand its network as it seeks to catch up with Verizon and AT&T in the cellular business. Presently, T-Mobile has 44.7 million retail customers and Dish 13.8 million satellite TV customers.
Questions still remain about the purchase structure of any prospective deal with talks on those unresolved issues still at a "formative stage." The WSJ report said its sources felt that an agreement "might not ultimately be hammered out." Any deal is likely to be big, given the companies' respective market caps: T-Mobile is valued at $31 billion and Dish just under $33 billion.
If a deal were to be reached, the Dish-T-Mobile merger would be the latest in a wave of consolidation in the telecommunications and television industries and comes soon after Charter Communications announced $67 billion of deals to link up with Time Warner Cable and Bright House Networks to create the second-largest cable operator in the U.S. The Dish-T-Mobile would also be in a similar vein to AT&T's $49 billion deal for DirecTV, which will create America's largest pay TV group.
The WSJ report suggests that a Dish-T-Mobile merger could face less scrutiny from regulators as the two constituent companies compete in different industries, and the resultant combination would, in theory, create a strong wireless competitor.