Yesterday Dish and its billionaire chairman Charlie Ergen publicly withdrew its $2.2B bid for the restructuring wireless challenger LightSquared. The move comes just as the trial starts into whether Ergen was buying LightSquared debt he wasn’t allowed to buy in order to swing the auction his way.
LightSquared got itself into its current mess by making plans to build out spectrum assets that had been aimed at satellite communications into a wireless network without actually having the final approvals to do so. Whether one agrees with either side of the controversy or not, objections from the GPS community over interference killed that effort and sent them into bankruptcy court. But the billionaire behind the effort, Falcone, still wants the spectrum and has his own reorganization plan on the table that Dish had been trying to trump.
If all this seems like a whole lot of bother about a wireless operator that never actually had a network, customers, or revenue and is sitting on spectrum it isn’t even sure it will ever be able to use, then you’ve grasped the essentials. Seems like this has turned into a billionaires’ legal pissing match and little more. However, the final destination of that spectrum is still worth keeping an eye on because spectrum is in the end a limited resource and sooner or later it will be needed.
But with Dish now not in the game for LightSquared and the Sprint battle now long over, it seems likely that the third act is likely to open on T-Mobile’s doorstep sooner or later. Dish needs to do *something* with its spectrum after all. Rumors over the holidays already had them making such plans, and yesterday’s developments suggest they could be clearing the decks for a target shift.
Even after the recent deal for a slice of Verizon’s spectrum holdings and the growth it has been reporting, T-Mobile needs more if it wants to maintain its momentum in taking on the top three. Sooner or later Dish will have to fish or cut bait with the spectrum it holds, and there aren’t that many paths to follow from here.
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Categories: Mergers and Acquisitions · Wireless
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“If all this seems like a whole lot of bother about a wireless operator that never actually had a network, customers, or revenue and is sitting on spectrum it isn’t even sure it will ever be able to use, then you’ve grasped the essentials.”
Classic!
That was a classic line….good one Rob !
Charlie is like a bull in a china shop…he is so rich he just brings his own china shop.
Next stop…TMUS !
“Charlie is like a bull in a china shop…he is so rich he just brings his own china shop.”
Also well-said!
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