Is Dish Poised to Become a Force in Mobile Broadband?
Dish Network Corp. (NASDAQ:DISH) has positioned itself as a huge force in mobile broadband after a series of moves related to U.S. airwaves, but it will need help from U.S. regulators in order to move forward. The added value to Dish could be immense if the company proves successful — upwards of $5 billion according to Bloomberg.
In 2012, Dish paid $2.78 billion for the airwaves owned by two satellite companies, and then it prepared those airwaves for ground-based networks. It pledged to bid an additional $2.2 billion in an upcoming auction to acquire bankrupt LightSquared Inc.’s mobile frequencies. Now, Bloomberg reports that Dish is offering the Federal Communications Commission a deal: Dish will make sure the U.S. airwaves auction in January will succeed by setting a price floor of $1.56 billion, but only if its allowed to alter airwaves it already owns — a move that would make its airwaves far more valuable.
While analysts are not sure whether Dish co-founder and chairman Charlie Ergen’s goal is to build a wireless network, find a mobile partner to lease his inventory, or resell the airwaves, any of the three options would mean huge value increases for Dish. Amy Yong and Andrew DeGasperi, New York-based analysts with Macquarie Equities Research, said in a note on October 15 that if Dish were to win its January auction for LightSquared’s frequencies while obtaining flexibility from the FCC, Dish’s value could rise from $24 to $37 a share — an increase in market capitalization from $5.24 billion to $8.07 billion.