Dish Network Acquisition in AT&T’s Future?

Today Bloomberg News reported that AT&T is looking into a Dish Network acquisition to gain wireless airwaves after a failed attempt at purchasing T-Mobile due to regulatory opposition.  What AT&T was really after was the airwave spectrum, but in order for the purchase to go through, it had to give up the spectrum according to Stifel Nicolaus analyst Christopher King.

King speculates that government regulators will allow the purchase of Dish for airwave spectrum, because “Dish and AT&T aren’t direct competitors, and at the end of the day, the government wants to see spectrum used.  It’s highly unlikely regulators would block two AT&T deals in a row.”

A quickly growing demand for airwaves, fueled by the number of mobile devices being purchased to stream video and browse the internet, that carry data and voice signals is pushing internet providers like AT&T, Verizon and Comcast to make deals with organizations that traditionally were viewed as the competition.  Of course, government regulations prohibit monopolies, many of these deals end up falling through, such as in the AT&T / T-Mobile situation.

Ultimately, the federal government wants to see the spectrum being used.  Bloomberg analyst Paul Sweeney says that a Dish acquisition by AT&T would also give AT&T more leverage when negotiating with cable networks, as Verizon has recently done in it’s agreements with Comcast, Time Warner Cable and Cox, who will all market and sell Verizon Wireless service so that cable customers have a wireless option.  The added spectrum will make AT&T a much more attractive partner.


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