Dish Network Seeks a Re-entry Path

    Sprint’s plan to acquire the 49 percent of Clearwire that it doesn’t already own – as the company prepares to itself be sold to Japanese firm Softbank – hit a snag this week when Dish Network made an unsolicited competing offer. Reports say that Dish is offering $3.30 per share, which is 33 cents more than Sprint.

    The general thinking is that Dish won’t end up with Clearwire. By the same token, they say, the offer is a serious one and Sprint may be forced to make concessions. For instance, MarketWatch suggests that Clearwire may end up with a wholesale arrangement with Sprint or gain access to some of its spectrum.

    If this analysis is right – that Dish is playing positional chess and its end game is extracting some advantages, not ultimately owning Clearwire – it is worth looking at developments at the satellite video company.

    Indeed, this isn’t the first recent news involving Dish. In mid-December, the Federal Communications Commission (FCC) agreed to let Dish build an LTE network using spectrum that initially was set for use by satellite services. Ars Technica, quoting a Wall Street Journal story on the move, said that Dish could have built the network without the FCC’s approval. In that case, however, a satellite chip would have had to be put in handsets, which would have driven costs up.

    It perhaps is significant that Sprint is mentioned in the earlier story, which itself links to a Reuters piece:

    If Dish doesn’t build its own network, it could sell the spectrum or partner with a wireless provider like Sprint Nextel, Reuters reportedRecent rumors suggest Dish is talking with Google about a wireless partnership as well. Dish said yesterday that it “will consider its strategic options.” However it plays out, it would take a while: in May, Dish made a filing with the FCC that pegged 2016 as the likely rollout date.

    There is a 12-dimensional chess element to all this. But the bottom line is pretty simple: Dish is working to transform itself. Twenty years or so ago, Dish and fellow satellite provider EchoStar presented the first real challenge to the cable television monopolists. Of course, satellite never beat the cable operators. But the companies managed to carve out a nice niche.

    Time passes, however. The use of orbiting satellites is great for one-way delivery of video. However, it has serious limitations for the highly interactive, real-time services that dominate today. Satellite services are subject to latency because of the time it takes signals to travel the hundreds of miles to and from earth. The inherent difficulty of sending data from earth to the satellite – the upstream or return path, in telecom parlance – is another stumbling block.

    Consequently, the satellite providers are looking to leave orbit, so to speak. It’s obvious from the nature of the two news items of the past month that Dish is angling to make this move. The context that should be understood is making this move probably in the long run is a do-or-die issue for the company.

    Carl Weinschenk
    Carl Weinschenk
    Carl Weinschenk Carl Weinschenk Carl Weinschenk is a long-time IT and telecom journalist. His coverage areas include the IoT, artificial intelligence, artificial intelligence, drones, 3D printing LTE and 5G, SDN, NFV, net neutrality, municipal broadband, unified communications and business continuity/disaster recovery. Weinschenk has written about wireless and phone companies, cable operators and their vendor ecosystems. He also has written about alternative energy and runs a website, The Daily Music Break, as a hobby.

    Get the Free Newsletter!

    Subscribe to Daily Tech Insider for top news, trends, and analysis.

    Latest Articles