According to Reuters, the Federal Communication Commission has ensured that it would not push either company to sell spectrum. The body will treat the Sprint and Clearwire deal on the same grounds as the Softbank’s bid to acquire Sprint Nextel Corporation (NYSE:S). The acting Chairwoman Mignon Clyburn has already circulated the draft order, with recommendations to approve the deals, to other two members of the committee.
Softbank has also received approval for its Sprint acquisitions from concerned U.S. regulatory bodies. According to Reuters, both U.S. anti-trust and national security regulators have approved Softbank’s bid. After beating DISH Network Corp (NASDAQ:DISH), this was the only factor that could have destroyed this deal. The access to Clearwire’s 4G technology and investments from Softbank will make Sprint Nextel Corporation (NYSE:S) a formidable player in the telecom arena.
The outcome of this acquisition struggle has been in the best interest of both shareholders and Sprint. Sprint Nextel Corporation (NYSE:S) under Dish would have been a highly leveraged company. This would have disabled Sprint from investing heavily in infrastructure, a necessity in the highly evolving telecom sector. The control over Clearwire’s airwaves and investment backing from Softbank make Sprint an excellent long-term investment.
Dish has lost a fiercely competitive bidding war, but the company is still not done. It will continue to look for an entry point into the telecom industry. Dish is also working in a maturing industry and is struggling to find more organic growth. This is a primary reason behind the high M&A activity in the industries related to wireless services.
Another method to drive growth is diversification. ‘Quad-play’ is an upcoming trend in the European telecom industry. Leading telecoms like Telefonica and Vodafone are acquiring cable companies to offer television, broadband, mobile and fixed-line under the same brand.