Is DISH’s dream shattered?
Not only is Sprint Nextel Corporation (NYSE:S) out of DISH’s reach now, Clearwire, too, has distanced itself from the satellite operator to complete its deal with Sprint after it sweetened its bid to $5 a share. So, where is DISH headed?
AT&T or Verizon could take some interest in acquiring DISH for the massive wireless spectrum that it recently bought to build a mobile wireless network. Another possibility could be DISH’s rival and primary satellite TV provider DIRECTV (NASDAQ:DTV), which could think of merging with the company.
What are the other options for DISH?
First, DISH could raise its bid for Clearwire to beat Sprint’s revised proposal of $5. Second, it could get into discussions with T MOBILE US INC (NYSE:TMUS) as an alternative to Sprint. T-Mobile recently completed its merger with the pay-as-you-go carrier, MetroPCS. In fact, even SoftBank was said to be in talks with T-Mobile and keep it as its second option when DISH placed more difficulties in its way to combine with Sprint.
Finally, as suggested earlier by Chairman Charlie Ergen, if nothing works out for the satellite TV company, it could put up its acquired spectrum for sale. What would Ergen’s next move be actually remains unpredictable. Clearwire shareholders are slated to vote on July 8 and I believe it would be in favor of Sprint unless DISH comes up with a better offer.
My takeaway
Things remain unclear for DISH, but Sprint’s future looks bright. The carrier is in the expert hands of SoftBank. Sprint’s acquisition by the Japanese telecom giant is a blessing for the company. Though Sprint Nextel Corporation (NYSE:S) has superb strategic plans, it will not be able to achieve them in the absence of SoftBank’s financial backing and Clearwire’s spectrum support. This is the best time for the national carrier in years post the miserable Nextel acquisition.
Although there won’t be any significant changes in the near term, Softbank Corp (USA) (OTCMKTS:SFTBF) seems set to turnaround things for Sprint Nextel Corporation (NYSE:S) and increase the competition in the U.S. which is dominated by Verizon and AT&T. It would be interesting to see how the rankings of the wireless carriers change in the next few years.
The article Sprint Shareholders Finally Bless SoftBank-Sprint Merger 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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