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Direct TV wants Cable MSO's to dump Clearwire stock


bigsnake49
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DirecTV Group Inc. (NYSE: DTV) wants Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks to shed their investments in Clearwire LLC(Nasdaq: CLWR) as a condition of their proposed sale of Advanced Wireless Services (AWS) spectrum to Verizon Wireless .

DirecTV's proposal, described in this Federal Communications Commission (FCC) filing, comes into play as the Commission and the U.S. Department of Justice review the proposed sales, which are valued at about $4 billion and also include Cox Communications Inc. 's AWS spectrum. T-Mobile USA is in line to gain some of that spectrum, but only if Verizon Wireless can get those deals done. (See VZ Wireless/T-Mobile Spectrum Deal Has a Catch.)

 

"Allowing these MSOs to continue to hold minority ownership and management interests in Clearwire despite their new arrangement with Verizon Wireless would enable them to hamper further development of Clearwire's competing network and services, both by impeding new initiatives and by refusing to make additional investments," DirecTV argued in the filing.

 

http://www.lightreading.com/document.asp?doc_id=223133&site=lr_cable&

 

This is getting curiouser and curiouser. A grand DirectTV/Clearwire/Sprint tie-up?

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I'm hedging my bets and saying that at least one of the two DBS companies will strike some sort of agreement with Sprint (or maybe Clearwire) in the near-ish future.

 

Sprint no longer has ties to wireline phone companies (potential competitors...CenturyLink, which bought Embarq awhile back, is doing "Prism" IPTV service in some markets) or cable companies (they're all in bed with Verizon now). That's a plus for cooperation with D*...and Sprint actually has a rural footprint that they're planning on upgrading to LTE (T-Mobile still hasn't figured out how to do this). And...wait for it...rural folks are a pretty big source of subscribers and revenue for DBS.

 

Without repeating too much of the comment I posted here:

 

http://www.lightreading.com/document.asp?doc_id=223133&site=lr_cable

 

My bet is that D* would swoop in to get either a majority or significant-minority stake in CLWR, with Sprint expanding their stake to include most of the rest of the company, since cablecos dumping shares would drop the price of the company through the floor. Sprint would use their increased position to ensure that Clewarwire TD-LTE wasn't being billed to them per-gigabyte so NV can optimize spectrum use the right way (2500->1900->800). D* would use CLWR TD-LTE for fixed broadband, installed by satellite installation contractors, potentially with decent caps and definitely with high speeds (my bet is 20+ Mbps down and a few Mbps up over a single TD-LTE 20MHz channel, with channel-bonded TD-LTE coming later with higher speeds). Add VoIP, and DirecTV has triple play to compete with cable. Add a Sprint partnership (Sprint doesn't do fixed broadband anymore, nor does it do linear video delivery) and you have a quadruple play that both Sprint and DirecTV can cross-sell.

 

Sounds like a win-win to me, though this would mean Clearwire would have to deploy some coverage-optimized TD-LTE sites (to serve more D* fixed customers...though these sites could have PCS or even CLR style spacing due to higher gain on fixed antennas), but that's not actually a bad thing.

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I'm hedging my bets and saying that at least one of the two DBS companies will strike some sort of agreement with Sprint (or maybe Clearwire) in the near-ish future.

 

Sprint no longer has ties to wireline phone companies (potential competitors...CenturyLink, which bought Embarq awhile back, is doing "Prism" IPTV service in some markets) or cable companies (they're all in bed with Verizon now). That's a plus for cooperation with D*...and Sprint actually has a rural footprint that they're planning on upgrading to LTE (T-Mobile still hasn't figured out how to do this). And...wait for it...rural folks are a pretty big source of subscribers and revenue for DBS.

 

Without repeating too much of the comment I posted here:

 

http://www.lightread...3&site=lr_cable

 

My bet is that D* would swoop in to get either a majority or significant-minority stake in CLWR, with Sprint expanding their stake to include most of the rest of the company, since cablecos dumping shares would drop the price of the company through the floor. Sprint would use their increased position to ensure that Clewarwire TD-LTE wasn't being billed to them per-gigabyte so NV can optimize spectrum use the right way (2500->1900->800). D* would use CLWR TD-LTE for fixed broadband, installed by satellite installation contractors, potentially with decent caps and definitely with high speeds (my bet is 20+ Mbps down and a few Mbps up over a single TD-LTE 20MHz channel, with channel-bonded TD-LTE coming later with higher speeds). Add VoIP, and DirecTV has triple play to compete with cable. Add a Sprint partnership (Sprint doesn't do fixed broadband anymore, nor does it do linear video delivery) and you have a quadruple play that both Sprint and DirecTV can cross-sell.

 

Sounds like a win-win to me, though this would mean Clearwire would have to deploy some coverage-optimized TD-LTE sites (to serve more D* fixed customers...though these sites could have PCS or even CLR style spacing due to higher gain on fixed antennas), but that's not actually a bad thing.

 

You and I are thinking along the same lines. I think the value of the spectrum that Clearwire has is in fixed broadband applications particularly as a delivery vehicle for video, but not necessarily for broadcast video, but video on demand. I would expect that Dish's spectrum would also be targeted for that. I think that Sprint's spectrum position is sufficient for mobile applications, but not for video delivery.

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Add VoIP, and DirecTV has triple play to compete with cable. Add a Sprint partnership (Sprint doesn't do fixed broadband anymore, nor does it do linear video delivery) and you have a quadruple play that both Sprint and DirecTV can cross-sell.

 

The big problem I can see with this is and always has been the fact that in apartments/condos etc. you can't use dish. And that is where the densest group of customers are located.

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Add VoIP, and DirecTV has triple play to compete with cable. Add a Sprint partnership (Sprint doesn't do fixed broadband anymore, nor does it do linear video delivery) and you have a quadruple play that both Sprint and DirecTV can cross-sell.

 

The big problem I can see with this is and always has been the fact that in apartments/condos etc. you can't use dish. And that is where the densest group of customers are located.

 

Some apartment complexes allow it. The other thing that dish can do is to have one antenna for the whole complex. Highgain, high bandwidth antenna.

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What if Clearwire decided to go as a private company?

 

Then where are they going to get money to roll out LTE? They don't have close to enough cash to buy out their shareholders.

 

From JBtoro on Forum Runner

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Then where are they going to get money to roll out LTE? They don't have close to enough cash to buy out their shareholders.

 

From JBtoro on Forum Runner

 

Maybe private placement?

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Buy out their public shares and turn around and offer private placement? Sounds inadvisable.

 

From JBtoro on Forum Runner

 

No, private placement allows them to buy back their public shares. All shareholders then agree to take it private.

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