Dish Agrees to Acquire DBSD for $1 Billion
The satellite TV company will buy the broadband provider, which has operated under bankruptcy protection.
NEW YORK - Charlie Ergen's Dish Network has agreed to pay about $1 billion to acquire satellite company DBSD North America, a unit of ICO Global Communications that has operated under Chapter 11 bankruptcy protection.
But Wall Street so far is mainly playing guessing games about the satellite giant's plan for DBSD.
Dish previously had bought some of DBSD's debt.
DBSD has been developing a hybrid system for satellite and terrestrial communications focused on wireless phone and broadband services.
A Dish spokesman didn't immediately comment on what the company's plans are for DBSD, but the deal suggests a possible interest in rolling out broadband services to better compete with cable operators' product bundles.
Analysts said Dish has not shown its cards when it comes to its DBSD plans. "I've heard lots of good theories, ranging from wireless broadband to mobile TV to a wireless over-the-top virtual multi-service operator, but the truth is that I'm just guessing, just like everybody else," said Sanford C. Bernstein analyst Craig Moffett.
Wunderlich Securities analyst Matthew Harrigan said the acquisition could be "a big deal strategically" as it could make Dish more competitive with cable bundles. The firm may end up "developing an integrated satellite and terrestrial broadband voice and data effort," he suggested.
Under its acquisition deal, which requires FCC approval and is contingent on DBSD's emergency from Chapter 11 bankruptcy, Dish will also provide a loan of $87.5 million to DBSD.