Sprint Nextel Corporation (S) Raises Clearwire Corporation (CLWR) Bid, What’s Next for DISH Network Corp (DISH)?

Does Dish’s have a Plan B?

There are good chances that DISH Network Corp (NASDAQ:DISH) may initiate talks with T MOBILE US INC (NYSE:TMUS), which recently closed its merger deal with pay-as-you-go carrier, MetroPCS Communications Inc (NYSE:PCS). Even SoftBank had kept T-Mobile as its backup when Dish was making things very difficult for the Japanese telecom player. Ergen is said to have discussed matters with the fourth-largest U.S. carrier earlier this year.

My takeaway

Finally, Sprint Nextel Corporation (NYSE:S) seems to have all that it wanted: SoftBank’s financial backing and Clearwire’s prized spectrum asset. However, Sprint’s debt position, after it concludes its deal with Clearwire, remains a matter of concern. The national carrier already reported a debt of $16.7 billion on its balance sheet for the first quarter of the year. Clearwire Corporation (NASDAQ:CLWR)’s acquisition will further increase its debt.

Also, the carrier’s operating margin of 2.44% during the first quarter is much less than fellow players, Verizon and AT&T. However, the company’s huge expenditure to build a vast network and reduce costs could pay off in the future. 2014 is going to be an exciting year for Sprint and considerable changes are expected to be seen in its financials. I believe its current stock price of $6.96 is decent, as investors would stand to benefit from capital gains in the future. Dish Network, on the other hand, looks a little wobbly. The satellite provider could try its luck with T MOBILE US INC (NYSE:TMUS) to break into the wireless space.

Sprint is a decent play. I believe that with Masayoshi’s determination to rise to the top, the Kansas carrier is set to reform into a much tougher, challenging contender to effectively fight the virtual duopoly of the market leaders.

The article Sprint Raises Clearwire Bid, What’s Next for Dish? originally appeared on Fool.com and is written by Rajesh Marwah.

Rajesh Marwah has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Rajesh is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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