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Dish: If we prevail, Sprint is our likely partner


bigsnake49
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Dish Network (

NASDAQ: DISH) Chairman Charlie Ergen said the company would consider a partnership with Sprint Nextel (NYSE:S), which Dish is challenging with a rival bid for Clearwire (NASDAQ:CLWR).

 

On Dish's fourth-quarter earnings conference call yesterday, Ergen said he thought Dish's unsolicited $3.30 per share offer for 40 MHz of spectrum and a commercial agreement with Clearwire is "clearly a better deal than what Sprint has offered," which is $2.97 per share for control of the 50 percent of Clearwire it does not already own. Clearwire's board has said it is reviewing the Dish offer but still recommends the one from Sprint.

 

"If that transaction [Dish's offer to Clearwire] went through, Sprint's your most likely partner," Ergen said, according to a Seeking Alpha transcript. "The reverse of that is, is that, that offer is not accepted or there's a bidding war for Clearwire, right? And were we to lose that bidding war or if we were not to prevail for our offer for Clearwire, then Sprint's probably not a likely partner."

 

 

Ergen also said Dish will need to see how the bids play out, and what the regulatory environment is with the FCC. But he said the company has "other options." Still, Ergen said Dish's offer would be good for Sprint and Clearwire and that "we're playing to win."

 

 

Hey, Charlie, the old Sprint is not the new Sprint. The old Sprint needed your money to help with their NV. The new Sprint does not. Yeah, Sprint, if you lose, we'll throw you a bone. I don't think Masayoshi Son likes that.

Edited by bigsnake49
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It sounds like Sprint may have changed their minds with dbag Charlie. Either playing hardball or telling him to fly a kite. So he thinks that if Dish can score Clearwire, he can force Sprint back to the bargaining table on a hosting deal and capacity leasing plan.

 

It's a shrewd tactic. But I don't think it's going to work out the way he wants. Sprint now has a sugar daddy and doesn't need to be raped by Charlie anymore. And the Clearwire deal doesn't seem to be working out for him.

 

"Sorry, Charlie."

 

Robert via Nexus 7 with Tapatalk HD

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It sounds like Sprint may have changed their minds with dbag Charlie. Either playing hardball or telling him to fly a kite. So he thinks that if Dish can score Clearwire, he can force Sprint back to the bargaining table on a hosting deal and capacity leasing plan.

 

It's a shrewd tactic. But I don't think it's going to work out the way he wants. Sprint now has a sugar daddy and doesn't need to be raped by Charlie anymore. And the Clearwire deal doesn't seem to be working out for him.

 

"Sorry, Charlie."

 

Robert via Nexus 7 with Tapatalk HD

 

Why does he not go with T-Mobile for hosting? They have upgraded or are in the process of upgrading their network. If all he wants is to get into the wireless business for handheld devices, then T-Mobile might be a better bet. What's the end game? The handheld device market is saturated. Yes,. he might be able to pry a few customers away from the big four but I believe it's a losing proposition.

 

The only conclusion is that Charlie wants to use Clearwire's spectrum and network for more than just data for handhelds. I believe that he wants it for fixed broadband and in particular VOD for devices as well as media gateways, video streaming for cars, internet gaming, etc.

 

I believe that Sprint should let him have the EBS leases and Clearwire network for a price as long as Sprint recovers their BRS spectrum. It might be a cheap price to pay for being allowed by the FCC to absorb T-Mobile/Metro.

Edited by bigsnake49
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Why does he not go with T-Mobile for hosting?

 

I am not sure that T-Mobile has the physical space to host another spectrum band. My local T-Mobile site has one "modernized" panel per sector and still two legacy panels per sector. I could be wrong, but I think that the legacy panels are remaining for GSM 1900.

 

AJ

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http://tmfassociates.com/blog/2013/02/22/this-year-next-year-sometime-never/

 

The question on everyone’s mind after DISH’s results call on Wednesday is of course “when will Charlie Ergen find a partner” to fulfill his wireless ambitions. Ergen was pretty clear that if DISH’s offer to buy spectrum from Clearwire succeeds then Sprint would be backed so far into a corner that it would be forced to partner with DISH (on Ergen’s terms). Conversely, if Sprint won its takeover bid for Clearwire then there is no way that DISH would accept Sprint’s terms for a partnership. The difference between DISH and Sprint’s positions appears to be that Sprint wants a LightSquared-like deal: a large cash payment for the network buildout, and Sprint having the option (but not the obligation) to buy capacity, whereas DISH wants Sprint to take its payment for a network sharing agreement solely in capacity, not in cash.

As an aside, its interesting to note that the relationship between Ergen and Hesse is obviously pretty poor: Sprint’s proxy for the Softbank deal notes that it was Keith Cowan who dealt with Ergen (Company Z) last summer, not Hesse. As a result, if Sprint did lose Clearwire’s spectrum to DISH, I wouldn’t be at all suprised to see the blame placed on Hesse, resulting in him leaving Sprint, and Masayoshi Son and Charlie Ergen could then work out a partnership between themselves.

If DISH’s bid for Clearwire fails, then DISH will at least have made an impressive profit on the deal: according to DISH’s 10-K, its holdings of Clearwire debt are now worth $951M, compared to an adjusted cost as of September 2012 of $745M. That is a profit of over $200M excluding the interest payment made in December 2012, which would have been at least another $50M (assuming the June interest payment is already included in the adjusted cost basis).

However, and more importantly, what is Ergen’s backup plan, if he simply takes his profits in Clearwire? If DISH wants to achieve a partnership this year, then the only realistic offer is to mount a counterbid for MetroPCS. Recall that DISH offered $11 per share for MetroPCS last summer (in parallel with DISH’s bid to buy spectrum from Clearwire) which was rejected as undervaluing the company. Given MetroPCS is now trading at only $10 per share, what does DISH have to lose by making a similar offer? At the very least that would force T-Mobile to the bargaining table, and DISH might be persuaded to withdraw its offer if T-Mobile offered an attractive network sharing deal. Indeed, if Clearwire’s special committee makes a decision next week to draw on the Sprint funding, I would expect DISH to potentially move on MetroPCS immediately thereafter.

If DISH doesn’t succeed with that gambit, then the timeline for a deal moves back at least until the end of this year or sometime next. LightSquared’s exclusivity in its bankruptcy case has been extended to July 15, but alternative offers can be made after that time, with a view to a resolution of the case before the end of this year. As I’ve noted before, if DISH takes a slightly longer time horizon, then a bid for LightSquared, and conversion of the 2GHz spectrum to downlink use would be an obvious value-enhancing maneuver. In addition, it would put DISH in a much better position to challenge Sprint in the auction for the H-block spectrum, which Sprint has admitted it needs to buy.

Finally, DISH’s ultimate fallback option may be to try and sell the spectrum to another company. However, AT&T appears well set for the next several years, having apparently decided not to pursue DISH when Ergen’s waiver request was denied by the FCC last spring. Verizon has also ruled itself out as a buyer and T-Mobile will be tied up integrating MetroPCS for some time (and after that acquisition will own more spectrum per subscriber than either AT&T or Verizon).

As a result, the timeline for that sale (at least if Ergen is to get an attractive price) may be pretty long, probably beyond the resolution of the broadcast incentive auction (scheduled for 2014) and perhaps even extending until after the 2016 Presidential election, if AT&T and Verizon are to be regarded as serious bidders, given the desire of the FCC to let Sprint and T-Mobile catch-up with their bigger rivals. That is even more likely to be the case if the recent slowdown in the growth of wireless data traffic prompts a reassessment of operators’ future spectrum needs and finally buries the supposed “spectrum crunch”.

 

Tim Farrar undervalues Sprint's bargaining position in my mind. I still believe there is a better chance of Sprint or AT&T owning this spectrum (especially if the magic qualcomm LTE chip recently announced is all it's cracked up to be) than his dream scenario where Hesse is out and Sprint is in a begging position to host Dish spectrum.

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I am not sure that T-Mobile has the physical space to host another spectrum band. My local T-Mobile site has one "modernized" panel per sector and still two legacy panels per sector. I could be wrong, but I think that the legacy panels are remaining for GSM 1900.

 

AJ

 

AJ, I thought they could add one more panel per sector. On the other hand some of their sites are on/in flagpoles, church steeples, so I'm not sure you can add anything to those.

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http://tmfassociates...sometime-never/

 

 

 

Tim Farrar undervalues Sprint's bargaining position in my mind. I still believe there is a better chance of Sprint or AT&T owning this spectrum (especially if the magic qualcomm LTE chip recently announced is all it's cracked up to be) than his dream scenario where Hesse is out and Sprint is in a begging position to host Dish spectrum.

 

I don't understand what Tim is talking about when he talks about Lightsquared and converting the 2MHz spectrum into downlink. How is that going to get DISH in a much better position to challenge Sprint in the auction for the H-block spectrum?

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You want to know how much of a "dbag" Charlie is? Then read this 7 page article the other day about our good friend Charlie Ergen and his business tactics just within Dish Network. I would say partnering might be a possibility but it is going to cost him a lot more with the latest Clearwire stunt he pulled.

 

http://www.businessw...y-in-america#p1

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I don't understand what Tim is talking about when he talks about Lightsquared and converting the 2MHz spectrum into downlink. How is that going to get DISH in a much better position to challenge Sprint in the auction for the H-block spectrum?

 

We have had a variation on this discussion before. Recall that Dish's S-band/AWS-4 spectrum is 2000-2020 MHz x 2180-2200 MHz. The PCS G block is 1910-1915 MHz x 1990-1995 MHz, and the PCS/AWS-2 H block is 1915-1920 MHz x 1995-2000 MHz.

 

In all three cases, the lower segment is the uplink, the higher segment, the downlink. The problem is that places G/H downlink and Dish uplink in very close proximity. And RF wise, uplink and downlink do not get along any better than Sprint and Ergen do.

 

Now, if Dish were to convert its lower segment to downlink operation, then G, H, and Dish lower segment spectrum would all operate like an extension of the PCS band downlink segment. And there would be peace on earth.

 

AJ

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We have had a variation on this discussion before. Recall that Dish's S-band/AWS-4 spectrum is 2000-2020 MHz x 2180-2200 MHz. The PCS G block is 1910-1915 MHz x 1990-1995 MHz, and the PCS/AWS-2 H block is 1915-1920 MHz x 1995-2000 MHz.

 

In all three cases, the lower segment is the uplink, the higher segment, the downlink. The problem is that places G/H downlink and Dish uplink in very close proximity. And RF wise, uplink and downlink do not get along any better than Sprint and Ergen do.

 

Now, if Dish were to convert its lower segment to downlink operation, then G, H, and Dish lower segment spectrum would all operate like an extension of the PCS band downlink segment. And there would be peace on earth.

 

AJ

 

AJ, I understood all of that the first time. What does it have to do with Lightsquared and the L-Band?

Edited by bigsnake49
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AJ, I understood all of that the first time. What does it have to do with Lightsquared and the L-Band.

 

LightSquared's L-band 1600 MHz uplink is unencumbered; it was the 1500 MHz downlink that ran afoul of GPS. I think what Tim is getting at is the potential for pairing the LightSquared 1600 MHz uplink with the Dish 2000 MHz downlink (converted from uplink). Sale of LightSquared's uplink spectrum could also provide some relief for its lien holders.

 

AJ

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LightSquared's L-band 1600 MHz uplink is unencumbered; it was the 1500 MHz downlink that ran afoul of GPS. I think what Tim is getting at is the potential for pairing the LightSquared 1600 MHz uplink with the Dish 2000 MHz downlink (converted from uplink). Sale of LightSquared's uplink spectrum could also provide some relief for its lien holders.

 

AJ

 

Now that makes more sense. But then what does Dish do with their orphaned uplink (converted from downlink)?

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Now that makes more sense. But then what does Dish do with their orphaned uplink (converted from downlink)?

 

One possibility, the orphaned 2180-2200 MHz downlink could be used for downlink carrier aggregation. A second possibility, it could be paired as downlink with 1755-1780 MHz uplink that is being bandied about for government/private spectrum sharing. It would be very similar to an extension of the existing AWS-1 2100+1700 MHz band.

 

Gotta run, but I can dig deeper and elaborate more late tonight...

 

AJ

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One possibility, the orphaned 2180-2200 MHz downlink could be used for downlink carrier aggregation. A second possibility, it could be paired as downlink with 1755-1780 MHz uplink that is being bandied about for government/private spectrum sharing. It would be very similar to an extension of the existing AWS-1 2100+1700 MHz band.

 

Gotta run, but I can dig deeper and elaborate more late tonight...

 

AJ

 

This is very exciting to consider. :idea:

 

Robert via Samsung Note II via Tapatalk

 

 

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We have had a variation on this discussion before. Recall that Dish's S-band/AWS-4 spectrum is 2000-2020 MHz x 2180-2200 MHz. The PCS G block is 1910-1915 MHz x 1990-1995 MHz, and the PCS/AWS-2 H block is 1915-1920 MHz x 1995-2000 MHz.

 

In all three cases, the lower segment is the uplink, the higher segment, the downlink. The problem is that places G/H downlink and Dish uplink in very close proximity. And RF wise, uplink and downlink do not get along any better than Sprint and Ergen do.

 

Now, if Dish were to convert its lower segment to downlink operation, then G, H, and Dish lower segment spectrum would all operate like an extension of the PCS band downlink segment. And there would be peace on earth.

 

AJ

 

Dumb question but why would someone want to have the uplink at a higher frequency vs. the downlink?

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Dumb question but why would someone want to have the uplink at a higher frequency vs. the downlink?

 

Not many FDD bands do have the uplink segment at a higher frequency than the downlink segment. The most notable one right now is VZW's Upper 700 MHz C block license, which is its exclusive LTE band. In uplink x downlink format, it is 776-787 MHz x 746-757 MHz. So, the uplink is 30 MHz higher than the downlink. That was done to place the Upper 700 MHz C block downlink and Lower 700 MHz C block downlink directly adjacent to one another. Had the Upper 700 MHz band followed a more traditional duplex, then the Upper 700 MHz C block uplink would have been directly adjacent to the Lower 700 MHz C block downlink. And, as discussed above, uplink and downlink on adjacent frequencies does not tend to work well.

 

See the band plan:

 

http://wireless.fcc.gov/auctions/data/bandplans/700MHzBandPlan.pdf

 

AJ

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Not many FDD bands do have the uplink segment at a higher frequency than the downlink segment. The most notable one right now is VZW's Upper 700 MHz C block license, which is its exclusive LTE band. In uplink x downlink format, it is 776-787 MHz x 746-757 MHz. So, the uplink is 30 MHz higher than the downlink. That was done to place the Upper 700 MHz C block downlink and Lower 700 MHz C block downlink directly adjacent to one another. Had the Upper 700 MHz band followed a more traditional duplex, then the Upper 700 MHz C block uplink would have been directly adjacent to the Lower 700 MHz C block downlink. And, as discussed above, uplink and downlink on adjacent frequencies does not tend to work well.

 

See the band plan:

 

http://wireless.fcc....MHzBandPlan.pdf

 

AJ

 

I guess my question is - how does performance differ in terms of coverage/usability having the uplink segment at a higher frequency?

 

In an ideal world, would you want uplink as low as possible? Say, 600MHz uplink, 750MHz downlink?

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